HRC prices flat in Europe; mills hoping for rebound in 2025
End-user demand for coil has been limited across Europe this week, hampering mill attempts to push for price rises, they added.
“Nobody is buying [coil] for stock,” a buyer source told Fastmarkets. “On the contrary, there is competition downstream between steel service centers to get rid of the material, so [HRC] prices reman under pressure,” a buyer source said.
Mills in Northern Europe were heard offering HRC at €580-600 per tonne ex-works for the first quarter 2025, but for November-December lead times, prices were still around €550-570 per tonne ex-works, sources said.
Buyers estimated the tradable level at €540-550 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €550.00 per tonne on Friday, up by only €0.62 per tonne from €549.38 per tonne the previous day.
The index was down by €3.13 per tonne week on week but up by €0.12 per tonne month on month.
On October 25, the European Commission started registering HRC imports from Vietnam, Japan, India and Egypt, thus paving the way for the potential retroactive application of anti-dumping duties.
And, along with existing safeguard measures, this latest move will significantly limit interest in importing HRC to Europe, sources said.
The reduction in the volume of imports to the EU should start to become apparent in the first quarter of 2025, they added, which could support a rebound in domestic HRC prices.
And if European suppliers proceed with production cuts in November-December, HRC supplies could be further limited, making a price rebound in January-February more likely, sources said.
“European mills have produced enough [crude steel] to claim their carbon credits for the next year, so it is very likely that they will curb their output at the end of the fourth quarter in 2024,” a trader source told Fastmarkets.
No official announcements about cuts have been mad so far, however.
In Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €546.25 per tonne on Friday, unchanged day on day.
The Italian index was down by €5.00 per tonne week on week, but up by €1.87 per tonne month on month.
Trading in Italy was also quiet, sources said, with suppliers so far unable to secure higher offer prices in transactions.
Local mills were offering December/January-delivery HRC at €570-580 per tonne delivered (€560-570 per tonne ex-works), Fastmarkets understands.
But buyers estimated the tradable level in Southern Europe at just €540-560 per tonne delivered (€530-550 per tonne ex-works).
“We did not negotiate December delivery HRC [purchases] yet, but we hope to get a 10-20 per tonne discount on the offer price,” a buyer in Italy said.
Market participants said that November lead times were still available from some suppliers.
Import prices, meanwhile, remain uncompetitive and no fresh business was completed in the week to Friday, sources told Fastmarkets.
In Italy, November-shipment HRC from Turkey was on offer at €580-590 per tonne CFR to Italy, including anti-dumping duty, while Asian material was on offer at €550-570 per tonne CFR.
EU starts registration of HRC imports from Egypt, India, Japan, Vietnam
This means that “if the necessary conditions are fulfilled,” anti-dumping duties could then be “levied retroactively on the registered imports in accordance with the applicable legal provisions.”
The Commission launched an anti-dumping probe against HRC imports from the four countries in August.
For the period from January to December 2023, HRC imports from the four countries were subject to different dumping duties, with Egyptian material at 30-40%, HRC from Japan at 10-20%, Indian HRC facing duties of 10% and Vietnamese material at 5-15%, according to the notice in the journal.
In 2023, the EU imported 9.22 million tonnes of HRC, according to Global Trade Tracker statistics. And, of the HRC total, Egypt supplied 753,115 tonnes, India 1.17 million tonnes, Japan 1.09 million tonnes and Vietnam contributed 1.16 million tonnes. The combined 4.19 million tonnes amounted to 45% of total HRC imports the EU in 2023.
Market impact
Market participants told Fastmarkets the latest anti-dumping move by the EU was no unexpected and said it will further limit interest in buying overseas HRC.
“There is basically only one ‘safe’ origin to import from now – Turkey,” a buyer in Italy told Fastmarkets. “But the offer prices [from the Turkish mills] right now are totally uncompetitive.”
A second buyer said the “AD probe and changes to safeguard measures will significantly limit demand” for all overseas coil.
“The effect of the [lack of imports to the EU] will start to show in the first quarter of next year [and the lack of imports] is likely to support a domestic HRC price rebound in Europe,” the second buyer added.
In the week to October 25, November-shipment HRC from Turkey was on offer to Italy at €580-590 ($627-637) per tonne CFR, including an anti-dumping duty of 4.70-7.30%, which has been in place since July 2021.
From Asia, offers were reported at €550-570 per tonne CFR to Italy.
In contrast, Italy-origin HRC, with five- or six-week lead times, was offered at a similar levels – around €570-580 per tonne delivered – which would net back to €560-570 per tonne ex-works, with possible discounts of no more than €10 per tonne, Fastmarkets understands.
Buyer ideas of the tradable level were lower, however, at closer to €540-560 per tonne delivered (€530-550 per tonne ex-works).
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy at €546.25 per tonne on October 24, down by €2.13 per tonne from €548.38 per tonne a day earlier and down by €5.63 per tonne week on week and by €6.25 per tonne month on month.
Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Northern Europe at €549.38 per tonne on Thursday, down by only €0.62 per tonne from €550.00 per tonne a day earlier.
Finland: Metso launches DRI smelting pilot facility to do customer-specific testing
Metso inaugurated a direct reduced iron smelting furnace pilot facility in Pori, Finland, with its hot commissioning to follow imminently, the Finnish industrial machinery company said in an Oct. 25 statement.
The new facility will allow customer-specific testing to demonstrate the applicability and effectiveness of Metso’s Outotec DRI Smelting Furnace technology. This technology was designed to substitute traditional blast furnaces in iron and steel production, significantly reducing emissions when combined with a direct reduction plant, such as Metso’s own 100% hydrogen-based Circored or other DR processes.
“The investment into the pilot furnace supports the rapidly increasing demand for testing when planning a transition to emissions-free smelting,” Metso’s Vice President Jyrki Makkonen said. “With the pilot facility, we can reliably test various types of customer materials for industrial scale-up.”
Metso announced it was investing Eur8 million ($8.7 million) in a prototype direct reduced iron smelting furnace in January.
German car production defies crisis fears
Passenger car production in Germany in the first nine months of 2024 amounted to 3.1 million units, only 1% below the first three quarters of 2023, says automotive federation VDA.
This does not suggest German carmaking is experiencing any kind of crisis, given also that full-year 2023 output surged 18% on 2022. However, VDA emphasises performance still remains poor versus pre-Covid levels, Kallanish notes.
In September alone, production even came to 393,600 units, rising 9% over the same month last year. However, the previous year’s level was weak by historical comparison, VDA notes, and adds there is “significant pressure” on the German carmaking industry. Compared to the nine-month output of the pre-Covid year of 2019, production after nine months of the current year was down 13%.
New car registrations in Germany remain in the red – in the first nine months, a total of 2.12m new cars were registered, down 1% year-on-year. As a result of the recent decline in car registrations, the gap to pre-crisis levels is still widening. Current volume is almost 23% below sales in the same period in 2019. In September, new registrations fell on-year for the third consecutive month, with 208,800 new cars registered in Germany, 7% fewer than in September 2023.
Exports have developed somewhat more dynamically. Since January, 2.4m new cars have been exported, 3% more than in the same period last year. These exports are still however almost 10% below 2019. In September, 305,400 brand new cars were exported from production facilities in Germany, up 11%.
Christian Koehl Germany
Market eyes coil increase despite low consumption: EuroBlech
Sources from mills, re-rollers, and service centres anticipate price increases for coil in November, as indicated by their opinions at the EuroBlech event in Hanover last week.
A mill source said he concluded transactions at the event and anticipates that prices will rise by approximately €30-40/tonne ($32.41-43.21/t) in November.
While the EU is contemplating the implementation of more stringent safeguard tariffs to support European steelmakers amid alleged Asian-origin dumping, a major steelmaker started to ask for a delivered rate of €600-620/t base for hot rolled coil at the tradeshow.
Additionally, potential production reductions are anticipated in the opening months of the new year, but no official announcements have been made.
Several buyers report the coil consumption recovery has not yet materialised in Europe. Kallanish is told by re-rollers and service centres in Italy they are increasing prices of tubes and sheets.
However, the market remains competitive and companies are willing to compromise on prices in order to avoid losing orders, given the prolonged low sales volumes.
Meanwhile, service centres’ customers are attempting to secure material for the first quarter of 2025 and some for the first half of the year at the current low prices for sheet. They anticipate prices of coil and its derivatives will increase.
Hot rolled sheet in Italy and other EU countries such as Germany and France is at approximately €620-630/t ex-works and €660/t for pickled sheet.
Some service centres are reporting losing orders as a result of their attempts to increase their prices by €10-20/t.
The market has been hit particularly hard by the consumption decline, with a large number of companies fighting for volumes both in southern and northern Europe.
Those who should be strict on price increases are frequently willing to offer discounts in order to avoid losing orders.
The HRC price recovery is stuttering due to weak downstream activity and collapsing production volumes in Europe’s automotive sector. However, several sources at EuroBlech stated that increases are “in sight.”
So far, the average price of HRC contracts in Europe remains steady at €550/t base delivered on average, or ex-works depending on client and point of delivery, with southern Europe experiencing marginally lower prices.
Import offers are diminishing, and some import contracts are also being heard at €530-540/t cfr southern Europe.
Meanwhile, the EU has enforced the registration of imports involved in ongoing anti-dumping investigations for cases that have not yet reached the provisional duties stage.
Specifically, imports of hot-rolled steel from Egypt, India, Japan, and Vietnam, as well as tinplate, seamless pipe and tube, and steel track shoes from China are now subject to import registration, among 12 ongoing anti-dumping investigations.
Natalia Capra France
EU begins registration of imports under investigation
The EU has brought into force the registration procedure for imports involved in ongoing anti-dumping investigations for cases that have not yet reached the provisional duties stage.
The European Commission initially announced last month it was planning on registering all imports of products under anti-dumping or anti-subsidy investigations, including cases awaiting provisional determinations.
Specifically, imports of hot-rolled flat steel from Egypt, India, Japan, and Vietnam, as well as tinplate, seamless pipe and tube, and steel track shoes from China are now subject to import registration, among 12 ongoing anti-dumping investigations, Kallanish notes.
The registration of imports is designed to prevent sharp increases in imports of products under investigation ahead of the imposition of measures and provide accurate data on import sources and quantities. Retroactive collection is not automatic.
“This registration establishes a legal basis for the possible retroactive application of anti-dumping duties in these cases, should the required conditions be met,” explains Yuriy Rudyuk, a partner at law firm Van Bael & Bellis.
The registration procedure becomes effective from 26 October, the day after the notice was published in the EU Official Journal. It will expire nine months thereafter.
In the case of the HRC probe, concerning imports from Egypt and Japan during the period from January to December 2023, the allegations in Eurofer’s complaint requesting the investigation estimate dumping margins from 30% to 40% and from 10% to 20%, respectively. They estimate an average injury elimination level of 26% and 29.3%, respectively. The amount of possible future liability would normally be set at the lower of those two levels.
For imports from India and Vietnam, the allegations estimate dumping margins around 10% and from 5% to 15%, respectively, and an average injury elimination level of 27.3% and 34.7%, respectively. The amount of possible future liability would normally be set at the lower of those two levels. The probe could find evidence of raw material distortions. In this case, the liability would be set at the level of the dumping margin, if it is concluded that a duty lower than the margin of dumping would not be sufficient to remove the injury suffered by EU industry, the Commission says.
Elina Virchenko UAE
EU HRC prices rise due to higher mill offers
Domestic European hot-rolled coil prices rose slightly Oct. 25, as many European mills increased their offer levels following the Euroblech Hannover steel fair, said a Germany-based mill source.
A major European mill is rumored to cut production in the beginning of the first quarter of next year, by temporarily taking one of its blast furnace sites offline, according to sources. The anticipated production cut, along with high import prices, is expected to support higher European flat steel spot market prices, said a Germany-based service center source.
Many European mills reported full order books until the end of the year, according to a Germany-based mill source. The source explained that spot market activity remained low due to weak demand from the automotive industry.
Platts assessed Northwest European HRC at Eur575/mt ex-works Ruhr Oct. 25, up Eur10 on the day.
Offers were reported at Eur580-640/mt ex-works Ruhr. Rejected bids were reported at Eur570-580/mt ex-works Ruhr. Tradable values were reported at Eur560-570/mt ex-works Ruhr.
Platts assessed domestic HRC in Southern Europe at Eur550/mt ex-works Italy, stable on the day.
The import market remained weak as the spread between import and European mill offers further narrowed. A Germany-based service center source reported that some import prices were higher than European offer levels.
Platts assessed imported HRC in Northwest Europe at Eur515/mt CIF Antwerp, stable on the day.
Platts assessed imported HRC in Southern Europe at Eur535/mt CIF Italy, stable on the day.