EU HRC market silent ahead of the new import quota period

The European hot-rolled coil market remained quiet in the week to Friday September 15, with buyers waiting until new import quotas in October before starting to restock, sources told Fastmrarkets.

Persistently slow demand from end-user sectors and a lack of clarity regarding the volumes of HRC imports expected to enter the EU market as of October 1, were limiting trading, Fastmarkets understands.

Buyer estimates of the tradable values for HRC in Northern Europe came in at €630-640 ($674-684) per tonne ex-works on Friday.

Most steel mills in the region could still offer October/November-delivery coil, however, which suggests that orders have been weak.

In general, offers for October/November-delivery coil in the region were reported at €640-670 per tonne ex-works, although buyers said the upper end of the range was “totally unworkable.”

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe, at €634.88 per tonne on September 15, down by €6.37 per tonne from €641.25 per tonne on Thursday.

The index was down by €9.91 per tonne week on week and by €9.70 per tonne month on month.

The Italian market, meanwhile, was also quiet, with trading activity at close to non-existent over the past few weeks.

Fastmarkets’ calculation of its daily steel HRC index domestic, exw Italy, meanwhile, was €626.00 per tonne on September 15, down by just €2.33 per tonne from €628.33 per tonne on Thursday.

The Italian index was down by €7.33 per tonne week on week and by €7.68 per tonne month on month.

Market participants told Fastmarkets that local producers had short order books and were ready to provide discounts on big volumes. Buyers, however, were not chasing for tonnages and preferred to postpone bookings for October, awaiting greater clarity on EU import quotas.

“We expect Q4 quotas for HRC [under the ‘other countries’ category] to be filled in just a few days after opening,” a producer in Italy said.

While firm offers were rare in Italy, sources told Fastmarkets that October- and November-delivery HRC was available from domestic producers at €630-640 per tonne EXW.

Buyer price ideas came in at around €620-630 per tonne EXW but, in general, there was little interest in making any bookings.

Asian suppliers have recently started offering January-delivery coil to Europe, Fastmarkets understands, with offers coming in at €610-615 per tonne CFR from Japan and Korea for January arrival – although that level was not considered workable by buyers in Italy.

“[Import offers for HRC] are just €10  [per tonne] lower than those from local mills and some Italian mills can still offer October delivery [for HRC], so imports are not really workable,”  a trading source in Italy said.

Lower offers did come in from Taiwan and Vietnam this week, sources said, at around €585-590 per tonne CFR for January arrival. But long lead times, safeguard-related risks and the relatively small gap to domestic prices in Italy were seen as the major stumbling blocks for import bookings at the moment, sources told Fastmarkets.

“We are abstaining from import bookings due to quota problems with [some] ‘other countries’ origins,” a second trader in Italy said.

Published by: Julia Bolotova