Bullish momentum fades in European HRC market

The bullish momentum in the European steel hot-rolled coil market has disappeared amid a lack of demand and with producers opting for a price rollover, trade sources told Fastmarkets on Tuesday June 18.

Slow demand from the key steel-using sectors in most EU nations was keeping spot trading weak.

Industry sources said that, due to lower order volumes from the automotive industry, European steelmakers had tonnages available to sell in the spot market.

“European mills are actively looking for orders. Many suppliers still have end-July delivery available,” a buyer in Germany said.

Despite the expected positive effect on the market of newly adjusted safeguard measures, the bullish momentum stalled.

“The key issue is the bad demand. And we are heading into summer – the market is usually dead in August,” a steel-service center in the Netherlands said. “[A leading European steelmaker] seems to have dropped the idea of increasing prices [for HRC] in the current conditions.”

Offer prices for July-August delivery HRC from German mills were reported at €640-650 ($686-696) per tonne delivered, sources said, which would net back to €630-640 per tonne ex-works.

Offers from suppliers from the Benelux area for July August-delivery HRC varied between €620 per tonne and €650 per tonne ex-works, depending on the mill.

Buyer sources estimated the tradable price about €620-630 per tonne ex-works, with transactions for small lots reported at €630 per tonne ex-works in Germany.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €632.50 ($677.71) per tonne on Tuesday, down by €1.25 per tonne from €633.75 per tonne on June 17.

The index was down by €2.92 per tonne week on week and by €5.83 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy, at €629.58 per tonne on Tuesday, down by €1.05 per tonne from €630.63 per tonne on Monday.

The index was down by €1.67 per tonne week on week, and down by €3.34 per tonne month on month.

July-August delivery coil was offered by a local supplier at €650 per tonne delivered (€640 per tonne ex-works).

“Mills seem to have ended their attempts to increase prices,” a buyer source in Italy said. “Demand is very weak and there is no ground for [HRC] prices to move up. Stability is probably the best option for mills at the moment.”

Buyers estimated the market no higher than €630-635 per tonne delivered (€620-625 per tonne ex-works).

Prices for imported HRC were largely unchanged, and the number of offers was limited.

Suppliers from Taiwan were offering August-shipment HRC to Italy at €610 per tonne CFR.

But considering the high risks related to safeguarding quotas, most buyers said that these offers were not attractive.

“For Asian coil, prices should be €550-560 [per tonne CFR] at the most, to [be accepted]. But there are no such offer in the market,” a second source in Italy said.

From Ukraine, two sources reported an offer at €580 per tonne CFR.

One Turkish supplier was seeking a €30 per tonne price rise, with new offers for August shipment HRC heard at €640 per tonne CFR to Italy, including the duty. But this price was not considered workable by Italian buyers.

Published by: Julia Bolotova