EU HRC: Italians eye imports

Some buyers in Italy are turning to hot-rolled coil (HRC) imports in the face of uncertainty over domestic September availability and prices.

There were unconfirmed reports of a deal concluded at around $495/t fob Turkey, but some questioned this price level and traders said they could not secure material for less than $500/t fob. Many saw €460/t cfr as realistic, but this is well above recent buyer expectations of €440/t cfr.

Smaller sales volumes from other countries have taken place following ArcelorMittal Italia's declaration of force majeure on 11 July. Sources suggest force majeure is still in place, but this could not be confirmed with the company. All the furnaces will be up and running soon, according to market sources.

An offer for Indian HRC was heard today at €440/t cfr, although some said this was for a cargo diverted from Vietnam. The price seems unsustainably low, given recent offers at around €475/t cif. Egyptian material was on offer at $500-510/t fob, but interest was limited.

ArcelorMittal is widely expected to announce another increase, but this could not be confirmed. Other mills are currently out of the market and likely to return with higher prices. Some question whether there is enough ground for increases to stick, given tepid demand.

Latest data from European auto manufacturers association ACEA shows new car registrations in the EU continued to fall in June, dropping by 7.8pc on the year. Germany saw a 4.7pc decrease, and Italy a 2.1pc drop.

The northwest European HRC market was quiet with the onset of the holiday season. But pricing was under pressure, with reports that one Belgian producer had sold 2,000t into the Benelux countries at the very low delivered price of €440/t. There has also been talk of similarly low prices from one German mill in the last few weeks. Argus' headline daily northwest EU index slipped by €1/t to €473.75/t ex-works, underpinned by 11 inputs. The domestic Italian HRC index also fell by €1/t — to €453.25/t ex-works, based on 12 inputs. Sentiment is firmer in the Italian market, with buyers exposed to ArcelorMittal Italia concerned about availability. Some traders say they are seeing greater interest in prompt loadings as a result.

Recent slab bookings into Italy have approached $445/t cif for September shipment, against $430-440/t for sales at the end of June. There are also reports of a mill in northwest Europe looking to import slab. Coil supply has also been delayed from one mill, with a blast furnace outage planned for the fourth quarter.

European steel association Eurofer said today it expects a 0.6pc decline in apparent steel consumption this year.