EU HRC: Indian mills increase market share

Indian producers of hot-rolled coil (HRC) have been more active in the European market amid declining prices in China and southeast Asia.

Sellers struggling to sell cargoes made up solely of commodity grade HRC have enticed buyers with lower priced extras and packages with other flat products, resulting in a higher amount of bookings into southern Europe. A seller was heard to have offered commodity grade HRC at €470/t ($525/t) cif Italy around 10 days ago. But a lack of interest resulted in it offering pickled and oiled coils for €15/t extra.

European imports of Indian HRC increased on the year in January-May, according to data from European steel federation Eurofer. And market participants expect volumes to continue rising over the summer, as Indian producers gain more market share in the absence of many competitive Turkish offers.

But the European Commission's imminent safeguard quota revision proposal could restrict Indian mills' access to European markets. Market participants expect the imposition of country-specific quotas. The measures will likely factor in 2018 volumes, rather than be based on average imports in 2015-17.

Domestic EU markets are muted, as is typical during the seasonally slow summer period. Uncertainty remains around the future of ArcelorMittal Italia's Taranto plant despite last week's plans by the company and Rome to work to maintain operations, as the Italian government crisis escalates. Some participants have said that there are no actual government commitments to grant immunity to the steelmaker, which will likely result in it significantly lowering crude steel production. The mill could continue and import more slab, but that could eat further into its margins.

The Argus Italian index nudged down by €1.25/t to €442/t ex-works today. The northwest European index held stable at €467.75/t ex-works.