The European HRC market has returned after the holidays with some positive movement in terms of official prices, but actual trade is taking its time to recover. The domestic price increase announced by the main regional producer is considered to be a positive sign, but many believe it will not be fully accepted by the market, at least not yet. In the import segment, several deals are reported to have been concluded, but overall trade has been slow as buyers are aiming to assess the local price situation, the raw material price movements, and the quota situation. In addition, the recent increase in concerns as regards the situation in Yemen, the Red Sea and the Suez Canal has raised the risks for shipments of materials from Asia, which may affect the situation in the import segment of the EU and the balance in the region overall. “The import market is half dead. Logistics challenges caused by situation in the Red Sea are having an effect, and sellers especially from Asia simply don’t want to sell,” a European source told SteelOrbis.
Earlier this week, ArcelorMittal increased its domestic prices by €50/mt to €800/mt ex-works in the northern part of the EU. By the end of the week, the mills in this part of the region settled their offers within €770-800/mt ex-works, while the estimated workable level is at €740-750/mt ex-works for March deliveries. In the south, mills are offering at up to €750/mt ex-works, versus €720-730/mt ex-works considered workable as of today, though some buyers still hope for discounted sales at €700/mt ex-works. Earlier in January, official offers from European mills were estimated at €700-750/mt ex-works, with the tradable levels at €680-700/mt ex-works, particularly in Italy.
In the import segment, there have been deals for around 20,000 mt of HRC from Egypt at $730-735/mt CFR Italy for March delivery, while new offers are at around the same levels. In addition, sources have reported a similar volume as sold from India to Europe at $695/mt CFR, while the new offers are at €650-670/mt ($715-735/mt CFR). Taiwan has also been in the market with $700-710/mt CFR, following a few sales at $670-680/mt CFR, closed before the holidays. In addition, Vietnam has also been eyeing HRC exports due to a less favorable situation in the local market and declining prices in China. According to sources, one of the Vietnamese producers has been offering at $720/mt CFR for February-March shipment HRC.
For now, Turkey is offering the highest levels to the EU, partly due to its strong local HRC and import scrap levels. Its offer levels are at $680-700/mt FOB, which comes to around €670-690/mt CFR duty paid and is not quite workable for now. However, the situation may change if European buyers choose a safer option and buy from a nearby destination, instead of risking shipments through the Red Sea.