Downbeat expectations prevail in European HRC market

Quiet trading conditions persisted in the European hot-rolled coil market on Monday April 24, with buyers expecting prices to correct downwards amid insufficient demand and cheap imports, sources told Fastmarkets.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €840.42 ($923.50) per tonne on Monday, up €0.42 per tonne from €840 per tonne on Friday.

The index was down by €10 per tonne week on week and by €12.71 per tonne month on month.

Two trading sources reported an offer from a mill in Germany at €870 per tonne EXW, but both agreed that this level was no longer achievable.

Most integrated mills in the region could only offer July-delivery coil, sources said.

Transactions were scarce because most major suppliers remained out of the market giving no firm offers for HRC, citing full order books. Buyers were also not chasing for volumes amid sufficient stock levels and downbeat expectations.

Most market sources estimated tradeable prices for HRC in the region at €830-850 per tonne EXW, while one trader suggested that €820 would be achievable for bigger volumes.

Market participants do not expect a shortage of commodity grades of HRC in the coming weeks despite production disruptions, they said. But sources agreed that if it was not for production stoppages at ArcelorMittal and Tata Steel plants, HRC prices might have dropped more.

“Warehouses are filled [with HRC], demand is disappointing and there are thoughts that prices will go down. So uncertainty rules,” a trading source in the region said.

“Commodity [grades of HRC] are easier to get, but steel service centers are giving different prices across a wide spread,” another source said.

Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €833.33 per tonne on Monday, down by €3.67 per tonne from €837.00 per tonne on Friday.

The index was down by €15.00 per tonne week on week, but up by €6.82 per tonne month on month.

Italy’s market was largely inactive amid holidays due to Liberation day on April 25.

“We are off on April 24-25 and most companies do the bridge till May 2,” a distributor told Fastmarkets.

Market sources estimated tradeable values at €820-850 per tonne EXW. But some sources doubted that the level of €850 EXW was still achievable given slow demand and very competitive import offers with lead times similar to domestic.

Offers for import Asia-origin HRC were reported at €700-720 per tonne CFR.

Indian mills were reportedly able to offer €690 per tonne CFR for May-June shipment coil.

Several sources said that one Vietnamese supplier was able to offer HRC with June shipment at €670 per tonne CFR to Italy.

An offer for June-shipment HRC from Japan was reported at $810 per tonne CFR.

Turkish mills were the most expensive, with offers heard at €800 per tonne CFR, duty included, for end-June delivery HRC.

Published by: Julia Bolotova