The coil import market in South Europe is reported to be silent as market participants are awaiting the imminent decision on possible provisional new safeguard measures, Kallanish learns from sources.
During recent weeks Italian mills have raised their HRC offers to €520-530/tonne ($605-617/t) ex-works also helped by the recovery in import prices. This week traders confirm that while the market is dead, it would be difficult to find any HRC below €540-545/t cif South Europe from Turkey or India.
“Turkish mills are offering at $620/t fob meaning a price in Italy of some €545-550/t cif Italy. We don’t see interest from buyers and we are not discussing discounts from these offers,” a trader confirms.
Meanwhile most of the talks continues to revolve around the possible safeguard measures soon to be announced. Traders continue to explain that the main issue will be how the quotas will be calculated.
One source notes that if quarterly country-based quotas are assigned there will be a clear problem due to the change in import sources during recent months. He notes, for example, that HRC imports have been seen mainly from India and Turkey since the beginning of this year. If a quota based on the past three years is calculated, these two countries would get a quota assigned inferior to the volumes already imported into Europe during January-June 2018.
Turkey, for example, sold over 300,000 tonnes of HRC to Italy during the Jan-Mar 2018 period, according to official data. Overall in 2015 it sold 230,000t and in 2017 the volumes surpassed 650,000t.
“We are struggling to understand how the quotas will be assigned and we fear that a structure similar to the one proposed by Eurofer could well distort the market because it would take away the flexibility to buy from the most competitive source,” a trader comments.