Domestic EU HRC prices threatened by competitive import offers

Domestic prices for hot-rolled coil in Europe remained unchanged on April 25 due to limited availability, but sources said that competitive import offers are likely to pull domestic prices down when the EU mills resume trading.
Slow demand from both end-users and distributors contributed to the bearish mood in the market.

“There is a lot of hesitation in the market, as demand is bad and import prices are significantly below the domestic indications,” a mill source said.

“EU mills want to maintain high level of prices, which is not really reasonable if you look at the gap between domestic and import prices,” an Italian distributor said. “It makes more sense to buy from Asia at such prices.”

In the meantime, only some South European and Central European mills have been able to offer June shipment coil, according to market sources. Major steelmakers have been holding back from offers due to the impact of technical issues, scheduled maintenances and full order books. Fires at two blast furnaces at plants owned by ArcelorMittal in Spain and France, and maintenance at some mills, including Tata Steel in the Netherlands and ArcelorMittal in Poland, have been the main drivers behind the mills’ decision to call off offers. The steelmakers are expected to resume trading in the first half of May.

“It seems that the mills do not think about the future, now they keep numbers stable but as soon as they return to the market, they will have to compete with import which is more than Eur100/mt cheaper,” a German service center said. “Demand is bad now. European mills manage to keep prices higher due to delays up to 10 weeks caused by technical issues and stoppages. And buyers had simply turned toward import to get required volumes.”

Platts assessed domestic prices for hot-rolled coil Northwest Europe stable on the day at Eur840/mt ex-works Ruhr on April 24. A majority of market sources reported tradable value at Eur840/mt ex-works Ruhr, while some said that Eur820-830/mt ex-works Ruhr will be achieved soon.

Platts assessed prices for imported hot-rolled coil in the region down Eur10/mt on the day at Eur710/mt CIF Antwerp on April 25.

Offers of the material from Asia were reported at Eur700-720/mt CIF Antwerp. One source also reported an offer from Japan at Eur680/mt CIF Antwerp.

Platts assessed domestic prices for hot-rolled coil prices in South Europe down Eur5/mt on the day at Eur825/mt ex-works Italy on April 25. Market participants estimated tradable values at Eur820-830/mt ex-works Italy.

Platts assessed prices for imported hot-rolled coil in South Europe at Eur690/mt CIF Italy on April 25, down Eur10/mt on the day.

Offers were reported at Eur680-700/mt CIF Italy.

Author Maria Tanatar, maria.tanatar@spglobal.com