The saga of gloom, as prevalent in HRC, extends down to the HDG market in Europe, specially Italy, Spain and Germany, as demand continues to be appalling from the end user segments.
The factors immediately affecting this depressed sentiment are as follows
1. Although end users are procuring in spurts, which is purely need based, the stockiest are suffering from “tomorrow things might get even cheaper” syndrome. And the story making rounds point to Euro 400 levels
2. In their endeavor to keep the stock at minimum level, the stockiest are placing back to back orders only.
3. As most of the distributors and service centers in Europe are mill owned, they have been specifically told to buy only from their parent companies - “if, indeed, they buy anything” - and not to import
4. Ware houses and distributors are carrying sizeable high priced inventory. Any attempt to liquidate this stock can be at the peril of bankruptcy. One of the ploy adopted is to procure new material in piecemeal and ease out the old stock at average price to minimize losses. Unless the old stock in the pipe-line is liquidated, recovery is far fetched.
5. Banks are reluctant to extend credit lines as they used to in the past and at the same time they are now becoming skeptic about the insurance support
6. The demand from automotive and home appliances industries remains sluggish without any signs of revival.
At present declared import prices are just nominal and based on prevailing offers from India and China. The pessimism is likely to get aggravated by preposterous scenario of China making aggressive offers as a result of the failure in demand revival in domestic market. Therefore, 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 | 500-520 | 470-480 | 410-420 |
| Spain | 490-520 | 460-480 | 400-420 |
| Germany | 500-520 | 480-490 | 440-460 |
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
On the other hand, situation is reported to be somewhat better in some other countries of Europe, specifically in Eastern Europe, from where inquiries are continuing to pour in.
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(Sourced from www.steelprices-europe.com)
