HRC EU import offers fall in uncertain market

Posted on 06 February 2020

Source: Kallanish

Import offers for HRC from Turkey this week moved down suddenly as the global market faces the joint uncertainty of the coronavirus outbreak and a fall in raw material prices, traders tell Kallanish.

The drop had been anticipated since the end of last week, but import prices remain above domestic offers, meaning an impact on transaction prices for HRC in Europe has not yet been registered. Traders believe the current global uncertainty is definitely not positive, but dismiss the possibility of a huge drop in prices for European coils now that the market is recovering to more sustainable levels. "We need to consider also that the current difficulties in China, if resolved, could lead to a sudden rapid jump again in prices," a trader notes.

This week a trader reports a sale of HRC from Turkey at €460-465/tonne ($506-512/t) cfr Italy for shipment in April. The reduction was possible due to the fact some Turkish sources had agreed to lower their offers, some say to as low as $480-500/t fob, down $15-20/t from last week’s levels. Another trader could not confirm sales at below $500/t fob, but stresses that he had heard that a bid at $470/t fob Turkey for HRC was rejected by mills.

“We still need to see what India will be doing in regards with offers, but European order books at mills remain good so I doubt the drop in import offers will lead to a sudden fall in the European market at the moment,” another trader adds.

"At the moment we still see no interest for purchases from imports, therefore some reduction is not affecting much the market," a source says. "Nonetheless uncertainty is not a positive [… condition], especially in the fragile South European markets."

Last week the Kallanish assessment for HRC imports into southern Europe surged to €470-490/t cfr, a level not seen since June 2019. The latest drop nevertheless still leaves the price assessment around €70/t above the lowest recent level registered in November 2019. 

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