Europe HRC market quiet with all eyes on quota release July 1

The European hot-rolled coil market remained quiet with the market looking forward to the July 1 release of import quotas, sources told S&P Global Platts June 30.

Sources said that even though there is anticipation that most of the import material has already been sold that will be cleared at ports from July 1, it would provide a view of how much material is entering buyers’ stocks.

“[June 30] will be a run on volumes at ports. Question is – what will fall under duty, and if yes what agreement is struck on who’s paying? There is an expectation that by [July 2] some country-specific quotas will be filled,” said a German service center source.

The source added that the Russian export duty that will also come into effect July 1 is likely to be workable in Europe and imports from Russia might still be competitive.

In the Northern European domestic market, trading remained quiet with mills booked for spot availability for the remainder of this year and the market not ready yet to start price negotiations for Q1 2022.

Sources expect price fluctuations to continue over the summer as trading is expected to be quiet. Though some expect some more competitive import offers, European mills are unlikely to move positions due to their full order books and backlogs.

“I think mills will rather curb production than lowering prices. [Price] Fluctuation will be there but not on a broader scale,” said a German buyer.

In the Italian market, sources reiterated that buyers were sitting on their hands and import volumes were too small to put serious pressure on domestic prices amid the ongoing supply tightness.

“We don’t either have much to offer, but customers are in wait-and-see mode as summer is starting and most of the needs are already booked,” said a Southern European buy-side source.

The daily Platts assessments for HRC slipped again June 30 to Eur1177.50/mt EXW Ruhr, down Eur2.50/mt, and to Eur1120/mt EXW Italy, down Eur5/mt.

— Laura Varriale