Hot rolled coil (HRC) prices have declined further across Europe in the past two weeks. Currently, HRC base prices in Italy stand at €390-400/mt, while in northern Europe they are at €405-415/mt, all ex-works. "We are in a phase where the market is very weak," commented the manager of a service center, adding that the level of demand compared to the pre-coronavirus period is now around 60 percent. Among the end-user industries, those most in crisis are the automotive and mechanical sectors. The sources interviewed by SteelOrbis agree that governments and the EU authorities need to implement stimulus measures, a large public investment plan and support for the auto sector.
Again as regards prices, it seems that the current levels are not profitable, which is why many expect an interruption of the current decreasing trend or even a rebound. The forecast is supported by a likely further contraction of import volumes, both in view of the results of the review of EU safeguard measures on steel and in the face of the opening of the investigation against ex-Turkey HRC. According to the latest data released by the European Steel Association (EUROFER), ex-Turkey HRC imports into the EU have already dropped in the first quarter of this year, falling to 530,000 mt from the 1.073 million mt recorded in the first quarter of 2019 Currently, offers from third countries stand at €375-380/mt CFR Italy. However, demand appears weak precisely due to the uncertainty caused by the trade investigations. In fact, the changes to the safeguard measures will take effect from July, i.e., in the period of arrival of material purchased at present. Several sources also fear that any duties on HRC from Turkey - the provisional duties could be imposed by mid-December - may be retroactive, which would give limited room to exports from Turkish producers to the EU in the coming months.