European CRC, HDG prices supported by limited restocking; real demand remains subdued
Slow end-user demand was the principal factor dragging on European domestic cold-rolled coil and hot-dip galvanized coil prices, sources said.
However, restocking and a lower supply due to output cuts allowed European mills to get small gains in CRC and HDG trading in November.
European producers were also busy negotiating long-term contracts with end users for the first half of 2024, and were said to be looking for €750 ($820) per tonne for hot-rolled coil — feedstock for CRC production — and €850 per tonne for HDG coil, in line with flat steel contracts for the second half of 2023.
“Mills want to push the spot market higher, in line with automotive contracts,” a trading source said.
In Northern Europe, local producers were offering around €770-780 per tonne ex-works for CRC and €790-800 per tonne ex-works for HDG.
Deals, however, were reported at lower levels — at €750-755 per tonne ex-works for CRC and €770 per tonne ex-works for HDG.
Lead times for both products were minimum 8 weeks, sources said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €750-755 per tonne on Wednesday, up by €5-10 per tonne from €740-750 per tonne seven days earlier.
And the corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €770-780 per tonne on Wednesday, narrowing upward by €20 per tonne from €750-780 per tonne in the same comparison.
Meanwhile, competitive offers from overseas suppliers were putting additional pressure on European prices. The strengthening of the euro against the US dollar has also made import more attractive recently.
The currency strengthened to $1.094 per €1 on November 22, compared with $1.077 per €1 on November 15, according to currency exchange website Oanda.
A transaction for a limited tonnage of Japan-origin coil with end-January shipment was reported at around €695-699 per tonne CFR to Southern Europe during the assessment week.
Suppliers from South Korea reportedly withdrew from the market and were expected to come back with higher offers shortly. Price ideas were no lower than €710-730 per tonne CFR to Europe for February shipment.
Turkish suppliers, however, were able to offer December shipment, January delivery CRC at €710 per tonne CFR.
A Vietnamese supplier was offering $840-850 per tonne CFR for 0.5mm HDG with Z140 coating for late January shipment.
Published by: Julia Bolotova
Steel HRC restocking limited in Europe, but mills still mull new price rises
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €659.75 ($721.73) per tonne on November 22, up by €3.50 per tonne compared with €656.25 per tonne on Tuesday.
The index was up by €14.62 per tonne week on week and by €46.62 per tonne month on month.
Transactions were reported at €650-660 per tonne ex-works in the region, while buyers estimated the achievable price to be €650-670 per tonne ex-works.
But buyers were booking only small tonnages in the highly volatile market.
“We all understand that the recent price rises are entirely cost-driven, supported by reduced supplies,” a trader in the region said. “But without support from end-user demand, [price increases] might not be sustainable.”
The most recent booking was still below integrated mill offers in the region, which were heard at €680 per tonne ex-works and at €700 per tonne ex-works for January-delivery coil.
In general, lead times for HRC in Northern Europe varied between six and eight weeks, Fastmarkets understands.
Despite a slow pace of restocking and subdued demand from end-users, producers in Europe were planning to announce another round of price rises for first-quarter-delivery HRC, with offers expected to be “above €700 per tonne ex-works.”
“[Integrated mills in Europe] gave a price idea for February delivery of €730 per tonne ex-works,” a steel service center source told Fastmarkets.
In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €639.38 per tonne on Wednesday, up by €4.38 per tonne from €635 per tonne on Tuesday.
The index was up by €6.88 per tonne week on week and by €41.71 per tonne month on month.
Italian mills were offering January-delivery HRC at prices no lower than €650 per tonne delivered in the local market, which would net back to about €635 per tonne ex-works, market sources said.
For February lead times, price ideas were closer to €680 per tonne delivered (around €665 per tonne ex-works).
Even though real consumption remained low in Italy, some sources said that there were signs of a revival in buying interest in the spot market.
“Even the most skeptical buyers see that the low prices are gone, [and] reduced domestic supplies and an uptrend in imports support the uptrend [in the domestic HRC market],” a source in Italy said.
In the secondary market, prices for HR sheet started to pick up in the week to November 22, to about €740-750 per tonne CPT, compared with €720-740 per tonne CPT a week earlier.
Overseas HRC suppliers to Europe were also seeking higher prices, with offers from Asia heard no lower than €620-630 per tonne CFR, for January shipment coil.
Offers from Indian mills were heard at €640-650 per tonne CFR to Italy, while HRC from Egypt was on offer in Italy at €620 per tonne CFR.
Published by: Julia Bolotova
EUROMETAL organized a webinar on CBAM
Last Monday, EUROMETAL organized a webinar on CBAM and particularly its impact on the Steel industry.
This webinar organised in collaboration with PwC Poland aimed to clarify doubts about steel imports subject to the new Carbon Border Adjustment Mechanism (CBAM), with penalties (fines) for non-compliance.
This webinar counted on the expertise of Senior Associate Martyna Jermalonek and Manager Daniel Maryjosz from PwC Poland.
86 participants registered for this event online.