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Steel trade only marginally affected by Suez blockage: sources

Highlights

If cleared within few days, blockage unlikely to have lasting impact

European flat steel buyers anxious as material shortage persists

Tuesday's Suez Canal blockage by a huge wayward cargo ship is likely to have only a marginal effect on steel imports and exports in Europe if vessels can pass through normally again within the next days, but any delay in material arriving will further intensify the current shortage in flat steel, sources told S&P Global Platts March 24.

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A Turkish trading source said: "The traffic should resume today or tomorrow. If that's the case then it won't be a cause of concern."

"The impact is limited to some delays only. The freight market is crazy already due to lack of vessels," said an Egyptian mill source.

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European buyers of imports however said that any delay in material reaching Europe will just intensify the apparent shortage of steel.

Sources said Southern Europe is likely to be more affected by any delay due to the import reliance of the region.

"The problem will prevent the ability for that material to reach Italy, so in the next days it'll be clear to assess the impact of this problem," an Italian distributor said.

"It's significant because it's an additional issue on top of what is already happening with the shortage, Ilva and Liberty Steel situation. The lack of allocation is completely desperate now. We have already the HRC delivery times is September."

The current import situation remains difficult for European buyers seeking material from outside the region as – despite flat steel price rallies in Europe – other regions remain more attractive for suppliers as they have seen even higher levels. An Indian import offer was heard at Eur830/mt CIF Antwerp March 24 by Platts, Eur30/mt higher than the daily Platts HRC EXW Ruhr assessment at Eur800/mt March 24. A CRC offer ex-India was heard at Eur995/mt CIF Antwerp March 24, while the Platts daily assessment for CRC stood at Eur940/mt EXW Ruhr, March 24.

"Posco rejected our bid last week, they said they wanted to sell in Asia instead. Mills are canceling import contracts again and again," said a European buyer.

The 1,300 ft vessel "Ever Given" was partially refloated by midday March 24, market watchers were mostly expecting the shipping route to reopen to traffic by late on March 24 or early the following day.