“Demand is very low,” a service center source said. “There is difficulty to sell material.”
“[Demand is] still very low,” said a distributor. “Without improvement expected.”
Heading into summer, trading activity has been muted in the European HRC market, with mills planning maintenance work.
Another point of contention has been the renewal of the EU steel safeguard measures, which have seen unfavorable reactions from stakeholders.
The EU steel safeguard measures will start on July 1, with a new restriction cap of 15% on six countries that used to ship their HRC under the residual tariff-rate quota. As HRC imports from Japan, Taiwan, Vietnam and Egypt will likely be reduced as a result, Europe-based buyers will have to substitute the material with either European coil or alternative non-EU suppliers without country-specific quotas.
“Instead of disincentivizing imports, it has just made them cost more,” another service center source said. “The duties are making the European system less competitive.”
On the supply-side, market sources believe that the quota will likely lift prices, but others remain convinced that with demand levels so weak, there will be virtually no change.
Market sources on the demand-side have also pointed out that while the quota cap for cold-rolled coil is acceptable, the respective cap for HRC is unattainable and will be filled rapidly.
Platts assessed Northwest European HRC at Eur635/mt on July 1, up Eur10 on the day, and domestic HRC prices in Southern Europe at Eur630/mt ex-works Italy, up Eur10 on the day.
