Trading activity in the European cold-rolled and hot-dipped galvanized coil market has been close to zero in the week to Sept. 28 due to high distributor stocks and reduced demand from end consumers.
Distributors still have high inventories of the downstream coil as a result of panic buying that followed Russian attack on Ukraine. The stocks reduction has been slow due to limited demand from major end-users, such as automotive and white goods industries.
In Northern Europe, cold-rolled coil was down Eur5/mt on week, assessed on the day at Eur835/mt ex-works Ruhr. Hot-dipped galvanized material was also down by Eur20/mt on week to Eur870/mt ex-works Ruhr.
Offers and tradable values for CRC have been reported at Eur820-850/mt ex-works Ruhr. And offers and achievable prices for CRC have been reported at Eur850-900/mt ex-works Ruhr.
European steelmakers have also been showing little interest in sales of commodity grade CRC and HDG due to high production costs.
Several mill and trader sources said that current prices have been at least Eur100/mt below production costs.
“Price for HDG needs to be at least Eur1,000/mt ex-works to cover costs and for CRC minimum price that mills need is Eur950/mt ex-works,” a Northern European mill source said.
The main reason behind a significant cost jump were surging energy prices in Europe. Impact from the higher costs has been limited for hot-rolled coil, used as feedstock for CRC and HDG. But for the downstream coil the situation has been different, sources said.
“Traditionally CRC has about Eur80-100/mt premium over HRC, but with chase in energy prices it should be substantially higher,” a German source said.
Platts assessed hot-rolled coil in Northwest Europe at Eur735/mt ex-works Ruhr Sept. 28.
Platts is part of S&P Global Commodity Insights.
— Maria Tanatar