The onset of New Year had rekindled some semblance of positives in the European market for HR but it took less than a month for this euphoria to vanish.
HR demand shifted for sluggish to negative mode making the customers buy in spurts and thus weaning away from entering into any long term booking. Inventories are reported to be high at mills. In other words, HR market in EU remains dormant in absence of any demand propelling factor.
European HR market is exhibiting below par activity, which also is rapidly diminishing. The Banks reluctance to issue credit lines is a vital dimension to this problem inhibiting any revival in the cash strapped business environment, in addition to the root problem of actual demand.
The mills have adopted a fluctuating pricing depending on their negotiating strength in each case. Thus it is really difficult to obtain a precise price indication because mills prefer to negotiate each order uniquely.
Buyer also fee that they would see low priced offers from overseas suppliers soon, especially China. A deal at EUR 335 CFR FO has been reported to have been closed last week from an Australian mill.
It is anticipated that prices are expected to reach its nadir in the next few months and following levels may be reached
Country | Domestic | Import | Prediction |
Italy | 360-370 | 340-360 | 300-320 |
Spain | 350-360 | 330-350 | 300-310 |
Germany | 400-420 | 350-370 | 320-340 |
In EUR per tonne
All prices are net to the final customer with following payment terms
A. Italy & Spain
1. Domestic prices are EXW or DDP with payment 90 days from delivery
2. Import prices are CIF FO with LC at 90 days from B/L date
B. Germany
1. Domestic prices are EXW or DDP with payment on the 15th of the following month
2. Import prices are CFR FO with open term payment at 30 days from date of arrival
It is also said that the HR pricing dynamics is awaiting alteration in second half once the mills attain reduction in raw material prices during the forthcoming negotiations. This impasse will be prolonged till the end of 3rd Quarter as the current demand levels are abysmally low and it will take sometime to normalize.
However, market sources have also reported, on the optimistic note, that some of the European HR mills are delaying their price announcements for April 2009, hoping the spot market could recover next month so that they can set a higher price. Mills suggest that now that the stock level is very low and the end users will soon return to the market, which will increase demand and the price will rise.