Posted on 24 Oct 2018
Coil import offers into Europe have continued to soften during recent months, but they could now be approaching the bottom of the current cycle, sources in the market tell Kallanish.
HRC from countries such as Turkey and Egypt can now be ordered at some €505-515/tonne ($579-591/t) cfr South Europe, but further corrections seem unlikely looking at the overall situation of the market.
One trader confirms that the situation of the Turkish mills remains critical, but says that price levels are now close to the breakeven point. Another trader says the only possibility for coil prices to fall further would be a new downward trend for scrap, which seems unlikely given the current high level of demand for the raw material.
"With scrap at $330/t cfr Turkey, mills now have production costs for HRC close to $520/t, meaning the current export offers at $550/t fob are already at the lowest level imaginable," the trader comments.
One source notes that there are rumours that the 50% duties on Turkish materials sold to the US could be reduced back to 25% soon. If this is confirmed, the market could see a recovery, otherwise negative sentiment will persist.
HRC import offers into South Europe have lost some €40/t since the beginning of August and offers for both HDG and CRC have declined even further. Turkey has become the main supplier of imported coil as India has reduced the volumes available and is now less competitive in terms of price.
