Prices for hot-rolled coils (HRC) in the EU have decreased today, but the downward trend is probably temporary, as prices are expected to depend on a structural supply shortage in the second half of the year, market participants said.
The scale of the supply shortage will depend on how much the EU's idle capacities recover, as well as on how restrictive and applicable the new steel import quotas imposed by the bloc will be.
Consumer activity has slowed down, but the fundamentals of supply remain stable, market participants reported. Factories have had to cut prices in recent weeks to account for persistently high inventories throughout the supply chain.
The daily HRC Argus index in Northwest Europe decreased by 0.25 euros per tonne (30 cents per tonne) to 695.75 euros per tonne excluding production, while the Italian index decreased by the same amount to 692 euros per tonne excluding production.
.At the end of last week, a service center in Northwest Europe ordered 5,000 tons of HRC at a price of 705 euros per ton. Traders indicated that the remaining supplies in the second quarter could be paid for at a price of 700 euros per ton. The deal was reported to be priced at 730 euros per ton, but no details were provided.
Currently, the plants indicate deliveries in the third quarter, offering a base price of 740-760 euros per ton for delivery to northwestern Europe. According to one of the traders, there is still little interest in these prices at the moment.
According to market participants, in Italy, the base price of 710 euros per ton is quite achievable. The imported stocks were sold in Italy at a price of 695 euros per ton, the trader said. Another trader offered a price of 690-695 euros per ton per day across Europe, while another trader said that in Italy you can buy shares at a price of 670-680 euros per ton per day. In Northwestern Europe, a trader offered raw materials in a warehouse at a price of 680 euros per ton, while customers offered a price of 30-40 euros per ton below this level.
"It's hard to imagine that steel prices won't rise even more, as imports are practically non-existent," the trader said. According to the trader, Europe has not yet fully felt the consequences of the Middle East conflict. "I think factories are preparing for higher prices," said another trader. Other market participants shared this opinion.
The Indonesian supplier continued to offer a price of 595-600 dollars per ton on fob terms, but did not receive any offers. A large Indian factory did not sell HRC products and retained the offer for cold-rolled coils (CRC) at a price of 685 euros per ton cif in Italy. The Turkish deal to supply HRC to Italy was concluded at a price of $ 620 per ton.
