This week, trade activity in the European HRC market has remained very slow given the “sufficient stocks” of most distributors and service centers, while most mills have withdrawn their offers from the market after closing their order books for July-August deliveries. Meanwhile, sentiments differ for the next few months regarding the future price trend in Europe. Specifically, while on the one hand, some market insiders expect the European HRC market to remain stable over the summer holidays given the absence of a significant demand improvement, on the other hand, other sources, mills’ representatives in particular, are more positive, expecting to push their prices up for September deliveries.
More specifically, while almost no firm offers for HRC have been voiced from European mills this week, the tradable prices have been estimated at €630/mt ex-works northern Europe, the same as last week, and at €620/mt ex-works Italy, against €625/mt ex-works last week. “Indicative prices from mills are assessed at €640-650/mt ex-works in both regions, but are not workable,” a market insider said, adding, “While most traders do not exclude a further possible decline in prices, mills still have hopes for price hikes for September delivery coils.”
In the meantime, while trade in the import HRC segment has been close to zero, most Asian suppliers have slightly cut their offers to European buyers this week to €595-605/mt CFR, down by €5-15/mt week on week. In particular, offers for ex-Vietnam HRC have been estimated at €590-595/mt CFR southern Europe, while offers for ex-Taiwan and ex-Japan HRC have been heard at €600-605/mt CFR, down by €5/mt week on week.
Offers for ex-Egypt HRC have been heard at $650/mt CFR, down by $10/mt week on week, which translates to around €602/mt CFR southern Europe. Furthermore, offers for ex-Turkey HRC have been estimated at $680-690/mt CFR, including duty, which corresponds to €630-639/mt CFR, the same as last week. According to sources, during the past week, several deals for ex-Turkey HRC from two Turkish mills have been signed, at around $650-665/mt CFR (€602-615/mt CFR), including duty, from one mill, while the other supplier sold its materials at around $675/mt CFR (€625/mt CFR), including duty.
Meanwhile, as expected, immediately after the opening of the new quota period, Vietnam, Egypt, Japan and Taiwan each exceeded their 15 percent EU HRC safeguard quota cap for the third quarter. In particular, according to EU Customs Tariff data, as of July 2, awaiting allocation for customs clearance for ex-Egypt HRC were 176,626 mt, exceeding the cap by 34,776 mt, while Vietnam had 208,880 mt waiting, exceeding its cap by 67,030 mt. HRC arriving from Japan totaled 209,403 mt, exceeding the cap by 67,554 mt, and HRC from Taiwan amounted to 228,520 mt, with 86,661 mt in excess of the cap. Thus, according to sources, for the abovementioned tonnages exceeding the quotas, customers will need to pay duty or will be subject to costly storage charges until the following quota period. “We heard the approximate duty to be paid will amount to around 4.9 percent for ex-Egypt HRC, eight percent for ex-Vietnam material, 8.1 percent for ex-Japan HRC and 9.5 percent for HRC from Taiwan,” a trader in Spain told SteelOrbis.
In the meantime, around 209,807 mt has been reported for ex-India HRC out of a total quota of 301,704 mt. “The remaining quota has not been filling quickly for ex-India HRC as Indian steelmakers were largely out of the export market in the second quarter due to maintenance works,” a source said.
$1 = €0.93