Lackadaisical European hot-rolled coil (HRC) demand is resulting in a very slow drawdown of the duty-free quota from the top six importing countries to the EU 28.
Turkey, Russia, India, Serbia, South Korea and Taiwan have around 2.6mn t available for the October-December quota, out of a duty-free potential of around 3.8mn t. The global HRC quota was amended as of 1 October so that no country can account for more than 30pc of quarterly imports.
Other countries still have over 1.4mn t that they could ship to the EU 28 between now and the end of December.
Out of all these third countries, Turkey has shipped the most HRC to Europe this quarter — it has 229,000t remaining out of its 635,000t duty-free allowance. Russia has 401,000t remaining out of its 635,000t quota.
Import prices to Europe have firmed significantly in recent weeks for a number of reasons, primarily anticipated production disruptions in Italy and a global uptick underpinned by rising scrap costs. But import prices are now out of step with domestic offers, certainly in the south, and buyers are holding off on their purchases and seem sanguine about availability going forward.
Argus’ weekly cfr southern Europe HRC assessment rose by €15/t last week to €440/t, a gain of €60/t since the end of October. Over the same period, the domestic Italian index has risen by €31.75/t to €419/t, while the northwest Europe index nudged up by just €14.50/t to €428.75/t ex-works — northern pricing is less import dependent and buyers have been slower to accept the increases sought by mills. Spot activity in the north has also ebbed quite dramatically, with buyers and sellers focusing on contract talks.
