EU HRC: Market expects high Indian arrivals

Hot-rolled coil trading activity across domestic European markets remained muted over the past week, but Indian mills began offering very competitively into the EU as a result of their short order books, weak domestic and southeast Asian demand and the rupee’s depreciation against the dollar.

Market participants said Indian mills asked for the equivalent of $460/t fob India at the beginning of the week, which they then subsequently dropped to $455/t fob. Some said that bookings were concluded at €435-440/t cfr Italy, although others questioned if buyers would be ready to make purchases during the last week of August.

Some European producers are more concerned about Turkey and are pushing for the European Commission to review its safeguards revision proposal, and requesting an anti-dumping investigation. At present, the EC’s proposal means Indian sellers get an edge over Turkey, as they have historically comprised well below 30pc of total EU HRC imports.

In comparison to India, Turkish HRC has been higher-priced, with offers at $475-485/t fob this week. Indian material is available with October shipment dates, while Turkish mills are offering November shipment HRC. European buyers have put forward speculative bids to Turkish sellers at $435-440/t fob, although the realistic bids stood at $450-460/t fob, market participants said.

Market participants are bracing for a flurry of import arrivals of flat products from India, which they said could depress the European market further. European imports of Indian HRC averaged at 82,980t/month in the first half of the year, according to industry association Eurofer, but in April 249,298t was imported from the country.

June imports of Indian HRC were just 16,033t- the lowest so far this year. Imports of Turkish HRC were also at the lowest level at 177,642t. As expected, overall June imports declined by over 200,000t on the year to 409,997t. This is the lowest monthly level since December 2014 – a testimony of the weakness in European demand amid high availability from local European mills.

The Argus northwest European and Italian HRC indexes held stable today at €466.50/t ex-works and €442/t ex-works, respectively.