International Steel Market Daily: Imported resources are arriving at the port one after another, European HRC prices may increase to the top (2022.3.28)

【Hot spot tracking】

After the European Commission on March 16 canceled some finished steel import quotas from Russia and Belarus and reallocated them to other countries, the European market's demand for Turkish HRC has continued to rise recently.

At present, the export price of Turkish HRC is about US$1,250/ton FOB, which is basically the same as the same period last year. The local European price is at $1,575/ton EXW. According to Mysteel, Turkey has already started accepting HRC production orders for June.

European steel prices have repeatedly hit new highs, the reasons are basically divided into two aspects. First of all, natural gas power generation accounts for 30%-40% of Europe. High natural gas costs have pushed up the cost of steel mills. It is understood that natural gas has risen by more than 60% compared with the beginning of March. In terms of thermal power generation, Russia, the largest supplier of thermal coal in Europe, is being affected by sanctions, and the cost of thermal coal power generation has risen accordingly. European electric furnace plants are facing high electricity bills and a shortage of raw materials and billets, and a large number of plants are shutting down. Eastern Europe is the most affected by this.

According to Mysteel research, many steel mills and traders questioned the continuation of high prices, and even thought it was "inflated", and believed that prices would fall after a period of time. Suppliers led by India and Turkey are using The HRC is sold to Europe at a price of about US$110-220/ton lower than that in Europe. In the near future, imported resources will arrive at the port one after another, and the transaction of domestic trade resources in Europe is weak, and the price may soon reach top. 

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