Lead times in the European coil market appear to have reduced somewhat, from a certain mill.
A leading European producer was offering September production into the Iberian Peninsula from its Spanish electric arc furnace at €1,210-1,225/t effective. Another leading producer said it would soon start selling October production, despite previous talk that it had booked for the fourth quarter.
Argus‘ daily Italian hot-rolled coil (HRC) index slipped by €5.75/t today to €1,097.50/t ex-works. The daily NW EU HRC index nudged up by €0.50/t to €1,170.25/t ex-works.
In Italy material was widely available at less than €1,100/t ex-works from local mills, with €1,060-1,080/t targeted all around, although there were higher offers to certain customers depending on their previous purchases and delivery windows.
Demand has slowed considerably and is below some market participants’ expectations, with buyers stocked up until the end of September and most producers offering for October. Buyers are expected to resume purchasing from late August, after the annual maintenance stoppages in the country.
A French mill was heard to be offering at €1,150-1,170/t delivered Italy, while an Italian re-roller was offering pickled and oiled material at €1,200/t ex-works.
Import prices appear to have bottomed out for the time being. With Chinese futures on the rise, some competitive offers have disappeared from the market, especially from Asian suppliers, and some mills have limited allocations. Offers from Turkey stood at $1,040-1,050/t fob Turkey, but discounts were expected as buyers were bidding lower. Turkish S355-grade HRC was sold into Antwerp at €1,050/t fot, effective, for October delivery, equating to €1,010-1,020/t for commodity grades. An Indonesian producer was offering about €970/t cfr into Antwerp and was seeking orders. Indian material was offered at $1,000/t cfr and below, in the expectation that a 25pc duty would be payable with October-December.
These lower import offers also subdued purchasing appetite in the north, alongside the impending holiday season.
Some buyers were still paying high prices to secure material after being caught with insufficient volumes at the start of this year. In some instances they were paying levels proposed by north European producers of €1,200/t and more. But the bulk of the market is not paying this amount, with many participants expecting domestic mills to reduce their quotations in response to the lower import offers.