Business activity in the European hot rolled coil (HRC) market has remained weak this week. Most European buyers are aiming for lower prices for HRC from mills, amid slow demand, still high stock levels, and the continuous pressure from falling import prices, though interest in imports has remained limited due to the safeguard quota issue. At the same time, more talk about the necessity of production cuts to stop price declines has been circulating in the market.
Accordingly, the general range in the EU HRC market has moved to €640-710/mt ex-works for April-May delivery, versus €670-720/mt ex-works last week. More specifically, while offers from Italian mills have decreased to €650-670/mt ex-works, down by €10-30/mt week on week, the tradable level estimated by buyers has been voiced at €640-650/mt ex-works. “Some bids have already been heard at €630/mt ex-works and below, but most people believe no mill will accept such a low price at least for now, though most producers are struggling to fill order books for the second quarter,” a market insider told SteelOrbis.
In northern Europe, most customers have reported the tradable level at €670-690/mt ex-works, versus €690/mt ex-works last week, while offers from mills stand at €700-710/mt ex-works, down by €10/mt on the higher end of the range week on week. Besides, offers from Italy have been reported at €700/mt delivered Germany this week, according to sources. “We need local mills to cut production to stop this price downtrend and to balance the market, which is currently facing overcapacity,” a European trader said.
In the meantime, import HRC prices in southern Europe have settled at €580-610/mt CFR for mainly June-July arrival, against €580-630/mt CFR last week. More specifically, most ex-Asia HRC offers, including those from Japan, Taiwan, South Korea and Vietnam, have been voiced at €580-610/mt CFR, depending on payment conditions, down by €10/mt on the lower end of the range week on week. According to sources, several deals for ex-Taiwan HRC have been signed at €600-610/mt CFR Spain through traders this week. Meanwhile the most competitive offers have been heard from Vietnamese suppliers at €580/mt CFR, while, according to market insiders, European pipe makers have been bidding for ex-Vietnam coils at €550/mt CFR this week.
Offers for ex-Egypt HRC have been estimated at around €610/mt CFR Spain, while Turkish suppliers have been silent this week with the latest offers reported at €630/mt CFR, duty paid, last week.
“Import activity will remain low throughout March, as all want to see on April 1 how much HRC will be custom-cleared and there will be more clarity on the duty rates needed to be paid,” a Spanish trader told SteelOrbis.