EU HRC: Italian mills eager to fill 4Q rollings

Italian mills are keen to finalise their rolling programmes for the fourth quarter, which means the market in southern Europe remains under some pressure.

Deals were heard at €450-460/t delivered base for hot-rolled coil (HRC), especially for buyers close to the mills. Official offers are around €450/t ex-works, and some said the mills were holding firm at these prices, but a discount would be necessary to attract larger orders. Argus' daily Italian index slipped by €0.25/t today to €437/t ex-works.

Turkish material was offered around €435/t cif Italy. This would perhaps be attractive on an effective basis, but some buyers were discouraged from booking Turkish material given the revised safeguard cap on market share of 30pc per export country. The safeguard changes become effective on 1 October, now they have been agreed to by member states — Turkey has consistently been above this level since

Indian material was still heard on offer around similar levels into Italy, while Indian cold-rolled coil was heard offered at around €500-510/t cfr Spain. There was some talk of lower offers, but these were deemed too cheap.

HRC was offered into Antwerp at around €440/t cfr, but appetite was still weak — a trader anticipates a flurry of bookings in the coming week on the back of low stocks at some service centres. A Turkish mill was heard to have sold 4,000t into Europe at $445/t fob, but it was not clear whether this was into the south or north. Into Italy it would equate to around €425/t cif, which is slightly below recent import prices.

There was talk of a northern European producer settling contractual volumes for 2020 €50/t lower than this year with one manufacturer. While the decline seems large, it is possible given the slippage in the spot market over this year. Argus' headline daily northwest Europe HRC index was stable on the day at €459.25/t ex-works today, but down by €60.25/t from €519.50/t at the start of the year.

The Argus northwest Europe HRC forward curve continued to slip today. September was assessed at €462.50/t, while October dipped to €460/t and November €460.50/t.