The looming EU safeguard announcement is beginning to discourage buyers from purchasing from the import market. Following the expected safeguard extension, sources believe prices for European coil and its derivatives, such as sheet and tube, will start climbing again.
EU safeguard measures are expected to be extended for one year from the beginning of July. According to rumours, the measures could be extended for a period of one year with an increase of tax-free quotas by 5% compared to current volumes (see Kallanish 19 May).
Continued shortages and strong demand, particularly from other European countries, are being reported for Italian hot rolled coil this week, market participants tell Kallanish.
Domestic HRC spot contracts remain stable on last week at a high €1,100-1,180/tonne ($1,340-1,437) base ex-works. Most contracts are however hovering at the low point of the range. Lead times span from the end of July till October and tonnages allocated for spot purchases remain limited.
Cold rolled coil and hot-dipped galvanised coil contracts are also stable compared to last week, but values can go up significantly if customers are ready to pay more for quick delivery. Contracts for both products are at €1,250-1,360/t base ex-works, sources suggest.
While competitive import offers from Asian countries have slowed domestic demand, European buyers are purchasing high volumes of HRC in Italy where service centres and end-users are putting off their purchases. HRC offers from Japan and India have been heard at €1,000-1,020/t cfr and €1,080-1,090/t cfr respectively. Some offers for CRC from India have also been reported at €1,200-1,220/t cfr, sources say.
Natalia Capra France
