The appreciation of the Euro to over $1.30 in mid-October (for the first time in more than four months) have transformed the European market into a real "Mecca" for suppliers of flat products from different countries of the world. Over the last two weeks in Europe was marked by companies from China, India, Iran, Turkey, CIS countries and Latin America, offering their products for delivery in November-January. In the conditions of General slump in the global steel market the European market with its artificial increase in the dollar prices became very attractive.
Even European steelmakers for the whole month tried to keep the quotes on the same level. In particular, the cost of hot-rolled coils ranged from EUR 470-480 / t EXW Italy to 510-520 euros per ton in Germany and the countries of Central Europe. But the suppliers from outside the EU could offer more favorable terms.
Cheapest hot rolled coil is sold to a Chinese company. Early in the second half of September it was reported about receipt of proposals to Italian buyers at EUR 435-445 per ton CFR, while in Antwerp, this production could exceed 475 Euro per ton CFR. Ukrainian and Russian products traded in South and Eastern Europe in the range of 450-465 euros per ton CFR/DAF. Finally, hot rolled from other suppliers were offered at EUR 470-480 / t CFR. The largest volume of deals was observed in Italy and the Benelux countries, whereas in Eastern Europe, shipments of flat products from the CIS were at approximately the same level as before.
Increased competition from importers by the end of September has forced European steelmakers to make concessions. To the greatest extent it concerned Italy, where the prices of hot rolled coils and steel plate decreased by 20-30 euros per ton, and other types of flat rolled ? on average, 10 euros for t
The situation on the European market for long products, too, looks quite complex. In early September, rebar prices jumped up due to limited supply volumes and new acquisitions made by the construction and distributor companies. However, in the second half of September, the demand again has narrowed, which has led to increased competition on the most active markets of Germany, Benelux and Central Europe, which offer their products local, Italian, Turkish and Ukrainian suppliers. The cost of reinforcement, in the first half of September reached in these countries 550 EUR / t CPT, the end of the month decreased to 510-540 euros per ton CPT.
In the South of Europe an important factor was the emergence in the Mediterranean of large volumes of Chinese long products at bargain prices. This forced European steelmakers to lose export quotes to 480-490 euros per MT FOB at a very sluggish response from consumers.
In recent days, the Euro went on the slide, so that as expected, the activity of suppliers from abroad in the European market will decrease, and the regional metallurgical companies will be able to take a breath. However, the future prospects are assessed by experts are not too optimistic. First of all, there are no reasons for optimism gives the economic situation in the EU. In the near future to discuss the issue of granting a new package of international financial assistance to Spain, which is experiencing more and more problems with refinancing its debt. The decline in the real sector continues, and is not visible, due to which it can be replaced by growth.
In addition, according to analysts, in September the European distributorsa the company has concluded a number of contracts with suppliers from China and India that deliver its products to the countries of the region only a few months. This can lead to a reduction in the current demand for flat products in Europe in November-December and trigger a new price drop.
At least, one of the leading European producers of steel is not planning in the beginning of the fourth quarter. At best, steelmakers are counting on the preservation of the current prices.
 
Victor Tarnavsky
Rusmet.ru