EU buyers expect domestic HRC price uptick, but unlikely to reach mills’ target prices

European hot-rolled coil buyers anticipated an uptick in domestic prices on Jan. 10 even though there remained uncertainties about mills being able to achieve their target levels.

Concerns regarding lack of real demand made some market participants hesitant about mills’ bullish targets as major steelmakers restarted idled blast furnaces, which would result in higher supplies in the coming months.

“Demand remains an issue,” a German service center source said. “Steel consumption of [original equipment manufacturers] expected to be 20% down in 2024.”

Tradable value for domestic hot-rolled coil was estimated at Eur700-750/mt ex-works Ruhr and market participants expect that prices would reach Eur750-780/mt ex-works Ruhr soon. Latest deals were also reported at Eur720-730/mt ex-works Ruhr.

Mills were offering HRC at Eur800/mt ex-works Ruhr as most were left with little material left for delivery in the first quarter 2024 and majority of offers reported for April-May delivery.

Platts assessed the price of domestic HRC stable on the day at Eur730/mt ex-works Ruhr Jan. 10.

Lack of interest in imports also aided sellers’ sentiments.

Surging freight rates due to geopolitical conditions in the Red Sea region made material from Asia-the major import origin, less attractive to buyers. In addition, the safeguard quotas for Asia-origin coil have been exceeded in the first quarter and also expected to be instantly filled in the second quarter. And buyers do not want to commit to purchases that would be custom cleared only in the start of the third quarter.

“Import market is half-dead,” a Germany-based trader said. “Exporters do not want to sell commodity material to Europe as they have logistics challenges caused by situation at Red Sea. So, any available offers are for material with higher added value.”

Asian mills offered HRC at Eur670/mt CIF Antwerp but no volumes were heard booked.

Platts assessed the price of imported coil in Northwest Europe up Eur10/mt on the day to Eur670/mt CIF Antwerp on Jan. 10.

Market activity in Italy remained sluggish with mills gauging the price directions before making offers.

“This is the first week on activity [after holidays] so almost nothing is going on,” an Italian mill source said. “But I think we will be ready to go close to Northern European mills’ offer levels when we make offers.”

Market participants estimated tradable value of domestic HRC at Eur700-750/mt ex-works Italy or delivered South Europe, depending on the buyer or the mill.

Limited offers were reported at Eur800/mt ex-works Italy or delivered South Europe, based on buyer and sellers’ locations.

Platts assessed the price of domestic HRC in South Europe up Eur20/mt on the day at Eur720/mt ex-works Italy on Jan. 10.

Author Rituparna Nath, Maria Tanatar