EU HRC market activity picks up

Some European steel buyers have rushed to book imported material this week, particularly hot rolled coil, ahead of anticipated price increases as tariff rate quotas fill up.

Market participants agree demand for imported material has risen in Europe, although by less than some would hope. There is "slightly more demand", one trader said, compared with the absolute lack of activity before the quotas were announced last week. But there are no fundamentals to support a price rise, the trader added.

Large trading companies have actively started purchases in the past week, another market participant said. According to another trader, bookings are being made at €550-570/t ($642-665/t) cfr EU ports, and HRC is available from Turkey, India, Taiwan and Egypt.

One importer said they are selling to south Europe this week at $630-635/t cfr for delivery in the first half of August.

Producers that do not have prompt shipment availability, as is the case with some Turkish mills, may struggle to sell material in Europe.

A Turkish producer was last offering for November shipment, although it said it could have cargoes with earlier delivery available. It was targeting $625/t fob in Europe. Another producer is sold out for September, and has not yet made an offer for October production to European buyers, it said.

A trader echoed levels as high as $625/t fob from Turkey, but said there are offers as low as $600/t fob from some mills. Another trader quoted levels from India at $625-630 cfr earlier this week.

"The market is a bit chaotic at the moment," a market participant said. "There are thousands of tonnes of steel blocked at customs, as people still don't know how to interpret the quotas. Overall I am not seeing a drastic jump in prices, because of seasonality, but definitely expect an increase in the coming months," the trader added.

In Europe two producers in the south were heard to have lowered offers to €525/t ex-works last week. But as of yesterday, one of the two increased prices to €540/t ex-works, having sold some tonnage last week.