European HRC prices inch up on expectations for limited imports

Prices for European steel hot-rolled coil increased slightly on Tuesday June 4, despite the comparatively low demand, sources have told Fastmarkets.

Sentiment among market participants has turned positive, however, on expectations that limited exports from Asian suppliers would support European HRC prices.

On May 30, the European Commission notified the World Trade Organization that safeguard measures would be extended for two more years. The Commission also suggested a 15% cap per single country over the residual HRC quota volume.

This is expected to affect imports from destinations like Japan, Taiwan, and Vietnam, which currently offer the most competitive prices, Fastmarkets understands.

On Tuesday, Northern European suppliers continued offering HRC in the range of €630-650 ($685-706) per tonne ex-works, sources told Fastmarkets.

Buyers estimated tradeable market levels to be in the range of €620-640 per tonne ex-works.

But a producer source based in Northern Europe was skeptical that deals could be signed at these prices and estimated the workable market level at €650 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €634.42 per tonne on Tuesday, up by €1.09 per tonne from €633.33 the previous day.

The index was down by €2.08 per tonne week on week and by €6.83 per tonne month on month.

In Northern Europe, buyers expected that the new safeguard adjustments would have a moderately positive effect on the market.

“Demand has improved insignificantly compared to the previous months,” a buyer source told Fastmarkets. But, according to them, the new safeguard adjustments could bring only a slight improvement in terms of prices because there was not enough consumption.

“Some positive effect in terms of prices can be expected,” a second buyer source told Fastmarkets. The source explained that due to the new safeguard measures, the availability of cheap import material offered in the past will decrease. Thus, consumers will have to buy HRC at higher prices, either from imports or from European mills.

The second buyer source added that it was difficult to predict what the potential increase of European HRC prices would be, but they were convinced that the new measures would stabilize the local market.

Meanwhile, in Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy, was calculated at €632.00 per tonne on Tuesday, up by €2.62 per tonne from €629.38 per tonne the previous day.

The index was up by €2.00 per tonne week on week and down by €1.75 per tonne month on month.

In Italy, HRC suppliers were heard offering the material at €650 per tonne delivered, which nets back to about €635-640 per tonne ex-works.

According to Fastmarkets’ sources, activity in the spot market has picked up with some deals heard to have been signed at €635 per tonne ex-works.

Buyers estimated the tradeable market level in the range of €630-635 per tonne ex-works.

They also expressed the opinion that local mills might try higher prices due to the new safeguard adjustments.

Regarding imports, a third buyer source told Fastmarkets that offers from Vietnam, Taiwan, and Japan had almost disappeared from the market. The source added that it was impossible to even start negotiations for material from these destinations currently.

The third buyer source also noted that most of the import offers were coming from Turkey now and were in the range of €580-585 per tonne CFR Italy, including the anti-dumping duty.

A fourth buyer source reported higher offers from the same destination at €610-620 per tonne CFR Italy, including the anti-dumping duty.

Published by: Darina Kahramanova