The bottom has been reached in European HRC prices. Hot rolled coil prices remained flat in Europe even though market representatives were pressured by producers for a hike. Prices were seen in the range of $730-735 per ton at European mills. Traders did not buy in mid-week as they were worried about short-term price increases.
Oversupply in the market
'There is a surplus of local and imported products in the market. Therefore, there is hardly anyone willing to buy at high prices in HRC.
Traders do not lower offers
European traders have halted sales, claiming that there cannot be a lower price for hot rolled steel. They said they would not lower their offers further.
Coil from Italy was offered to Germany at €720 per ton CPT for late July or August delivery. However, trade in the region was quiet as traders remain cautious and some are not sure if the price has bottomed out.
Some national sources predicted that hot roll prices in the region would stabilize at around €650 per ton ex-works, with limited stocking expected in early July for rolls to be delivered in September.
While the mills are full for the trader's hand, August and September are not yet full for deadline purchases and "stocks are running low, so they will need to be re-stocked." They made a statement that they would be able to put pressure on the price with production restrictions.
According to foreign sources, prices closed as follows the other day;
Hot rolled coil (HRC), domestic, ex-Northern Europe at €691.25. It dropped by only €0.63 per ton.
Hot rolled coil (HRC), local price ex-Italy increased by €7.20 per ton to €663.33 from €656.13.
Roll offers from Taiwan, India and South Korea for August shipments to Italy were heard at €610-620 per tonne CFR.
A Japan-based producer was said to be able to offer hot rolls to Italy for August shipment at €600-605 per tonne CFR.
In the Turkish market, spot remained flat with a slight increase among producers
The other day, a producer in the Aegean region announced a local ex-works price of $685 for HRC for August delivery while another producer in the Marmara region announced that they have started September deliveries and set the price at $700 (base). Ex-works prices continued at similar levels in Iskenderun Region. Producers were quoting $650 until a few weeks ago. Factory-based increases of around $35-50 were felt.
In the spot market, prices remained flat on the grounds that traders were having difficulties in sales and the increase at the mills could not give much sentiment to the market. HRC (hot rolled coils) were quoted between $750 and $770 among traders.