Cautious optimism in European HRC market amid expectations for post-summer demand recovery

European hot-rolled coil prices were seen stabilizing on Thursday July 27, with the post-summer outlook cautiously optimistic on an anticipated pickup in apparent demand and quickly depleting import quotas, sources told Fastmarkets.

Sources suggested that HRC prices across Europe would flatten in the upcoming weeks amid the traditional summer lull, but prices could recover from September.

“Currently, it is still a buyers’ market because of limited end-used demand. But the availability [of HRC] will be reduced in the coming weeks because the Europe-wide summer stoppages, while we expect some restocking after the vacation season. Hopefully this will support HRC prices,” a distributor told Fastmarkets.

Another factor that was supposed to support a rebound in European HRC prices was the expectation for lower imports toward the end of 2023 due to the rapid depletion of some safeguard quotas.

“Third-quarter quota volumes are almost [completely used up] so those tonnages would have to wait to be cleared through customs after October 1. [Consequently,] the fourth-quarter ‘other countries’ quota is likely to dry up quickly as well,” a distributor in Italy said.

There are currently still very few suppliers active in Northern Europe, with offers for September-October delivery coil ranging between €660 and €700 per tonne EXW, while buyers’ estimates of tradeable values were no higher than €650-660 per tonne EXW.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €655.63 ($726) per tonne on July 27, down by €0.62 per tonne from €656.25 per tonne on July 26.

The latest calculation of the Northern European index was down by €3.54 per tonne week on week and by €16.37 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €643.33 per tonne on July 27, down by €0.42 per tonne from €643.75 per tonne on July 26.

The Italian index was however up by €4.58 per tonne week on week but down by €2.66 per tonne month on month.

In Italy, the market was also very quiet ahead of summer stoppages.

Buyers reported tradeable values for September-October delivery HRC at no higher than €640-650 per tonne EXW on July 27.

At the same time, some sources reported price ideas for tonnages over 1,000 tonnes at €600-610 per tonne EXW, however, local mills were reluctant to accept such low bids.

In general, market sources did not expect HRC prices in the nation to dip more after the summer holidays.

“In the next three weeks the market will be deadly quiet, so no price movement can be expected. While for September I guess we can expect some rebound in [HRC] prices, driven by light restocking,” a trading source in Italy said.

Import HRC offers were largely flat day-on-day, with no fresh booking reported on July 27.

HRC for shipment in September-October from Asia was said to be available at €580-610 per tonne CFR to Italy.

A Japanese mill was offering HRC with end-September shipment at $680 per tonne CFR to Antwerp.

Published by: Julia Bolotova