Bullishness prevails in European steel HRC market; more price rises expected

The uptrend in European steel hot-rolled coil prices persisted on Friday November 24, despite subdued end-user demand, supported by reduced supplies and restocking activity, sources told Fastmarkets.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €666.67 ($726.98) per tonne on November 24, up by €1.46 per tonne compared with €665.21 per tonne on November 23.

The index was up by €8.75 per tonne week on week and by €55.67 per tonne month on month.

Restocking activity was improving in the region, sources said.

“Buyers realize that if they don’t buy today, tomorrow the price will be higher,” a mill source told Fastmarkets. “And there are talks about new increases before Christmas, so we got more inquiries this week [starting November 20].”

Transactions in the region were reported at €660-670 per tonne ex-works on Friday.

A small-tonnage HRC sale was heard in Germany at €680 per tonne ex-works, but this was not confirmed by sources.

Some mills in the region were said to selling the “last tonnages” of December-rolling coil at €640-650 per tonne ex-works, or even lower, but those offers were not widely available in the spot market.

For January deliveries, offer from integrated mills were heard at €680-700 per tonne ex-works, and because the lower end of that range was already sealed in deals, sources expected a new round of price rises to be imposed soon.

“We expect another €30-40 per tonne increase before the year’s end,” a stockholder in Germany said.

Some buyers expressed concerns about the acute uptrend not being supported by any upturn in real steel demand.

“I’m not sure [the uptrend] is a long-term story. It’s hard to increase prices for processed coil downstream. End users [will] resist any rise,” a trader in Germany said.

In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €658.88 per tonne on November 24, down by €0.50 per tonne from €659.38 per tonne the previous day.

The index was up by €15.96 per tonne week on week and by €58.88 per tonne month on month.

In Italy, offers from local producers were heard at €670-680 per tonne delivered, which would net back to about €655-665 per tonne ex-works, for HRC to be delivered in late January or early February.

Several sources confirmed that, in the week to Friday, several deals had already been agreed at new prices.

“There are not many buying options in the market,” a trader in Italy said. “Imports are not [feasible] because of long lead times and the high risks [of having] to pay the [EU’s import] safeguard duty. And domestically [in Europe], supplies are also reduced.”

Import offers from Vietnam, South Korea and Japan came in at around €620-650 per tonne CFR for January-February shipments, sources told Fastmarkets.

Although €620 per tonne CFR was considered a workable price, buyers were holding back from booking Asian steel, due to possible complications with customs clearance arising from the EU’s import safeguards.

Sources indicated that European ports still have quite significant tonnages of imported coil that did not fit the allocation to be customs-cleared in the first quarter of 2023, so they expected the “other countries” allocation for the first quarter of 2024 to be quickly filled with this material.

Offers of December-shipment HRC from Turkey were heard at €660 per tonne CFR, including anti-dumping duty.

Offers of India-origin HRC to Italy were heard at €640-650 per tonne CFR, for January shipment. Sources said, however, that starting in the week beginning November 27, Indian suppliers will raise their offer prices by at least €20 per tonne.

Published by: Julia Bolotova