Hot Rolled Coil (HRC) price in Europe (EU) market continues to slow down and many buyers expect the price to fall further more. Therefore, most of reservation has been delayed, caused a negative trend in the fourth quarter of 2019.
In particular, as Fastmarkets’ weekly price assessment for domestic HRC, EXW in Northern Europe was €450-460 ($491-502) per ton on September 25, down by €5-10 per ton in week and down by €30-35 since the beginning of the third quarter 2019. Besides that, EXW in Southern Europe was €420-440 per ton on September 25, down by €10 per ton in week and down by €45-50 per ton since the beginning of July.
The lower end of the assessment represented in Italy while the upper end reflected prices in Spain. Currently HRC steel prices imported to Italy are lower than domestic mills. Domestic suppliers try to stabilize market share and operate at full capacity to produce HRC steel in October 2019.
The main reasons behind the decrease in the third-quarter prices were poor demand and the competition from imports.
Market participants said that the recent price decline is likely to bottom out and worried about the macro-economic environment including manufacturing, Brexit issues and US-China trade conflict.
European steelmakers planned to increase HRC prices in late August but it was unsuccessful. Currently, imported HRC prices remain firm while many suppliers offered much lower prices, but none of them promoted the market demand. This situation is forecasted that can not improve in the rest of this year 2019.
Some steel mills said they would discuss with the buyers to adjust the contract term. In the coming years, steel mills are expected to raise prices and plan to shorten the contract term.
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