Traders in southern Europe have confirmed this week that the coil market seems to be preparing for a slight recovery, as import offers from Asia have been either withdrawn or increased.
A source notes that prices from Japan, South Korea and other Asian suppliers have fallen clearly below production costs in recent weeks. Now, some offers are seen increasing.
“We have received new offers from Taiwan with an increase of $25/t,” a trader tells Kallanish. “Similarly, supply from South Korea is now silent as the market is being assessed.”
One trader says the latest offers he received were at $620/t cfr Italy for hot rolled coil from Asia; another mentions $600/t cfr, still well above the levels of $560-580/t cfr heard until the beginning of last week.
“Mills in Japan and South Korea have decided to hold off for the moment, also to avoid further scrutiny from the European Commission on potential investigations. Meanwhile, domestic European mills are trying to stop the negative trend of prices domestically, while Indian suppliers remain uncompetitive,” a source adds.
Some believe this could be the last possibility for traders to take competitive positions to be delivered in the first and second quarters next year, but the market trend nevertheless remains uncertain.
“Clearly, the market has bottomed, but it is still too soon to confirm that a real recovery is in place. I can say that we have seen sales for prompt-delivery material at docks increasing during the last days, confirming that stocks are finally also exhausted among service centres and distributors,” a trader concludes.
Emanuele Norsa Italy
