During the last two weeks, an increasing number of Asian hot rolled coil import offers have been reported in the European market. Buyers are seeing very competitive prices from unusual sources such as Japan, said sources at Thursday’s Kallanish Flat Steel 2022 conference in Istanbul.

Traders and service centres in southern Europe noted that Japanese offers have fallen to €640-650/tonne cfr ($630-640). “In the past, Nippon Steel would not even pick up the phone; now they are actively offering material in the market for traders and unusual buyers for their products,” a senior trader confirmed.

An Asian source added that Japanese mills are trying to offload material due to the persistent slowdown in their domestic automotive sector, but that this is only a temporary situation.

Going forward, all sources at the Istanbul event confirmed their view that the European market is not yet preparing for a price rebound, though the bottom might be close. “I don’t think we can go back to pre-Covid prices [in the range of €500/t for HRC], because even Asian mills that are now competitive are very close to losing money on these sales,” said Mario Borsese of DP Trade. “The market is nevertheless not ready for a rebound yet because European buyers have options to avoid paying higher offers from domestic mills.”

According to the latest data related on safeguard measures, only 13% of available EU fourth-quarter import quotas for HRC had been used by 17 October. South Korea used almost 35% of its 180,000 tonnes of quotas, while India only 5% of the almost 300,000t quotas available.

New orders being placed now for HRC are set to arrive at the end of Q1 2023.