European traders and coil importers have noted a sudden sentiment shift during the last week. This comes after Chinese prices moved down and while the market awaits more clarity over a possible new tax on Chinese hot rolled coil exports, which could be imposed as soon as June or July.

One trader says official import offers from large suppliers have not changed much in Europe, but mills are now more actively trying to close deals, before prices potentially move down. From South Korea and Japan, HRC offers are reported at €1,060-1,070/tonne (1,293-1,305) cfr southern Europe.

"We have seen a change in mood from suppliers, now much keener in selling than during the last months,” a source tells Kallanish. “Buyers have not really changed their attitude as they still need to secure volumes due to the shortage in the domestic market.”

Two market observers report hearing traders selling short positions this week in the EU market, at as low as €950/t cfr from Asia for HRC. This would indicate they expect the market to move down rapidly in the coming weeks.

The imposition of an export tax on Chinese HRC would also have a direct impact on other coil products, such as hot-dip galvanized coil. One trader notes, for example, that Vietnamese HDG continues to be the most competitive for European buyers, but a sudden change in Chinese HRC supply could create problems for future deliveries.