EU CRC, HDG demand remains minimal, outlook gloomy

The EU downstream coils market saw prices fall on the week on muted demand, while mill sources reported maintenance to galvanizing lines in the summer period.

Platts assessed cold-rolled coil in Northern Europe stable on the day at Eur1080/mt ex-works Ruhr, according to S&P Global Commodity Insights data. Hot-dipped galvanized material was down Eur30/mt on the week at Eur1,120/mt ex-works Ruhr.

Demand for cold-rolled material remains minimal, though a 400 mt deal was heard May 31 at Eur1,080/mt ex-works Northern Europe. The deal matched offer indications received from buy- and sell-side sources, all citing offers at Eur1,080/mt ex-works Ruhr.

A service center source described downstream demand as “completely dead.”

“There is absolutely no demand whatsoever for downstream coils and automotive shows no prospect for recovery to pick things up again,” said the source. “Customers are repeatedly cancelling contracts as component shortages are causing vehicles to fall outside contractual terms – it’s unsustainable.”

For galvanized material, sources saw offers on a wider spread, with most offers heard at Eur1,100-1,150/mt ex-works Ruhr. A mill source reported a larger competitor offering at Eur1,050/mt ex-works Northern Europe, though other sources could not confirm receipt or sight of the said offer in the market. A mill source reported a bid received for Eur1,050/mt but rejected the bid as too low for current price levels.

Market participants reported Northern mills are performing maintenance on galvanizing lines through the summer period, confirmed by mill sources, with one smaller German producer reportedly communicating reduced availability of some steel products to customers for the short-term. The said mill remains the only producer to have communicated reduced capacities, going against buyer expectations of widespread production cuts for the summer period.

“Mills don’t seem to be cutting production, or at least aren’t talking about it,” said a service center source. “There is no chance to keep prices from falling with current demand and production rates.”

In South Europe, downstream coils saw more pressure, with cold-rolled coil assessed down Eur70/mt on the week at Eur1,030/mt ex-works Italy. Hot-dip galvanized material moved down Eur100/mt June 1 to Eur1,050/mt ex-works Italy.

Demand in the Southern market was similarly muted, with no transactional activity reported on the week.

On cold-rolled coil, buy-side sources saw tradable value on a spread of Eur980-1,050/mt ex-works Italy, with achievable prices for hot-dip galvanized material reported wider at Eur1,020-1,120/mt ex-works.

A service center source reported an offer for HDG at Eur1,080/mt ex-works Italy.

Another service center source reported pessimistic sentiments – “if we call prospects for the galvanized market ‘foggy’ then the picture for cold-rolled can only be described as ‘dark’.”

— Benjamin Steven, Maria Tanatar