Downward mood in EU HRC market prevails on low demand

Sentiment in the European hot-rolled coil market has remained bearish due to low demand from both distributors and end consumers, sources said on May 23.

Platts assessed domestic HRC prices in Northern Europe at Eur1,060/mt ex-works Ruhr, down Eur5 day on day.

Transactions for small tonnages of coil and achievable prices have been heard at Eur1,050-1,070/mt ex-works Ruhr. Some sources expected that the deals in the region would soon be done at Eur1,000/mt ex-works Ruhr.

“I think I would be able to get HRC at Eur970-980/mt ex-works from Central European mill soon, and with such demand prices from German mills will drop to Eur1,000/mt ex-works soon,” a trader said.

Steelmakers were planning to cut capacities and possibly stop some equipment if HRC prices in the north of Europe reach Eur1,000/mt ex-works, market sources said. The reduction of steel output would allow the balancing of supply with lower demand and, therefore, support domestic prices.

In Southern Europe, Platts assessed domestic HRC prices at Eur990/mt ex-works Italy, stable day on day.

Achievable prices and offers have been heard at Eur980-1,000/mt ex-works Italy.

Demand for flat steel has been low across Europe due to lower consumption from the automotive industry caused by components shortage and distributors’ high stocks.

Pressure from low importing, however, might ease after India imposed export duties on HRC of 15%. India is one of the key suppliers of HRC to both south and north of Europe.

“I think steel import from India will drop,” an Italian trader said. “Due to duties India will lose its competitiveness. For now, it is unclear what is going to happen to the orders that were not shipped.”

At the end of the previous week, offers of HRC from India had been heard at Eur850/mt CFR Italy, while no offers from the country were heard on May 23.

Offers of the material from Turkey, Egypt and Asia have been heard at Eur850-900/mt CFR Italy. The prices included anti-dumping duties where applicable.

— Maria Tanatar