Higher stock levels and summer holidays have seen prices for hot rolled coil in Western Europe move off since late July, industry watchers said.
“I have the impression that people are not fully back yet from their holidays,” one source said.
Those who have returned are now either taking a wait-and-see approach to any new buying or are purchasing only small amounts, the source added.
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Hot rolled coil slides in Western Europe
Offers on hot rolled coil prices produced in Western Europe are now about €1,150 ($1,350) per metric ton exw for December delivery. That marked a drop of 4.2% from the €1,200 ($1,410) in July.
Prices for cold rolled coil, a downstream product of hot rolled coil, normally carry a premium of €100-120 ($120-140) per metric ton.
Import offers on hot rolled coil from the Far East are now about €1,000 ($1,175) per ton cfr European ports, sources also said.
Another trader reported he had heard of offers from South Korea at €960 ($1,130) per metric ton cfr Antwerp.
India hits hot rolled coil quota
However, offers are now coming from India, as the country has used up its July-September hot rolled coil quota into Europe. That volume totaled slightly less than 170,000 metric tons.
“Indian hot rolled coil is not an option,” the trader added.
Earlier deals for the flat rolled product from India concluded at €1,000-1,100 ($1,180-1,300) per metric ton cfr European ports.
Chinese economic impact
Concerns over a slowdown in the Chinese economy are also keeping downward pressure on the West European market, the first source said.
“People think that if the mills are not able to supply to the local markets, then they will target export markets,” the first source stated.
“It’s not like there are 500 offers in the market,” he added about the availability of steel.
Steel prices normally move up later in the year as buyers try to hedge against prices increases that steelmakers could seek with the start of a new year.
Eye on the US
Market participants are also keeping an eye on the United States and President Joe Biden’s Infrastructure Investment and Jobs Act bill. The bill stipulates approximately $1 trillion to improve roads, bridges, pipes, ports, water supply, power grid and Internet.
The House of Representatives is due to vote on the bill in September. The Senate, meanwhile, approved it Aug. 10.
In addition, the United States and European Union are also working on reaching an agreement by Nov. 1 on the former’s Section 232 tariffs, which stipulate a 25% duty on steel imports.
The 27-member bloc is seeking a repeal of the tariffs. However, the E.U. is willing to examine other solutions, understanding that the U.S. wants to protect its steel industry, reports stated.
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