EU coils market bears mixed expectations, Italian HRC softens

The EU flat steel market was heard as in wait-and-see mode April 12, with participants bearing mixed expectations for the near-term.

In general, sources expected prices to stabilize in the near-term, with mills lacking space to move prices downward given rising production and energy costs.

According to one supplier source, prices were expected to stabilize, with an offer spread reported on the day at Eur1350-1450/mt ex-works. Established customer relationships with mills remain as paramount in accessing material at cheaper prices – the source considered tradable value at Eur1400/mt with large producers reported as holding strong around the Eur1400/mt mark for HRC offerings.

The market was reported as largely settled by a trader source expecting a market correction.

“Nothing is really changing at the moment and everyone is waiting for large players to make a move, stock levels are still high so purchasing is at a minimum. There’s cheaper material out there in the market post-quota clearances so I think domestic mills will have to relax their positions.”

In the South, prices softened further from recent peaks, with offers heard in a range of Eur1280-1300/mt ex-works Italy.

Mills were reported as having re-entered the market at lower levels in order to win back customer favor, having cancelled contracts following supply chain disruptions caused by the war in Ukraine. Sources expected prices to correct in the coming weeks, with one mill source predicting near-term tradable value as low as Eur1200/mt ex-works Italy.

S&P Commodity Insights assessed HRC in Northern Europe stable at Eur1365/mt ex-works Ruhr. HRC in South Europe was down Eur10 on the day at Eur1300/mt ex-works Italy.

— Benjamin Steven