EU Flat Steel Summary
European hot-rolled coil prices rose over the past week as mills hiked their offers on high costs, but low apparent demand means they will struggle to reach their target levels.
Argus’ daily northwest EU HRC index was €641/t on 6 September, up marginally from €637/t on 30 August. Over the same period the daily Italian HRC index rose from €628/t to €631.50/t.
Most mills have now announced €680-700/t as their target levels, but buyers are deeply sceptical given fiercely competitive sheet markets.
In north Europe the fiscal year end is approaching for some companies, meaning they are focused on liquidating stocks rather than restocking. Concerns over automotive demand are also exacerbating this to an extent – one important automotive supplier in Slovenia has been flooded, causing some supply chain disruption that is likely to intensify.
Some mills are becoming increasingly competitive on hot-dip galvanised and cold-rolled coil, according to German service centres, which, if true, is likely related to slower automotive demand. Automakers and their supply chain have been the main bright spot for coil producing mills in recent months, so any slowdown could weigh on prices.
To try and justify their new asking prices, mills are talking about increasing coking coal and carbon costs, and difficulties clearing HRC under the other countries quota, which is likely to fill very quickly upon resetting on 1 October.
EU Long Steel Summary
Subdued post-holiday demand in Italy and across Europe forced Italian producers to cut prices for long products, amid a downbeat construction sector outlook in response to challenging economic conditions in major markets.
The situation has changed little with the holiday period drawing to close, with demand muted and sentiment negative, a market participant said. The economic situation in Europe — and notably in Germany — is gloomy, they added. High inflation and interest rates have undermined the steel sector, another participant said.
Sale levels for Italian rebar settled at €600-610/t ex-works, with some mils heard willing to discount to around €590/t ex-works in the domestic market. Rebar offers from Italy to nearby countries were few and far between, but spools could be purchased at €575-585/t cfr in the Balkan market, as buyers stated. Bulgarian rebar was quoted at slightly over €600/t delivered locally and €595-600/t delivered in Romania late last week. Romanian material was available well below these levels, although the size range was limited.
Drawing-quality wire rod prices in Italy were steady in a €580-600/t delivered range.
Overseas offers were largely stable, with some negotiations under way, but most customers had sufficient stocks. Algerian rebar and wire rod was quoted at $550-560/t fob, while Egyptian indications were at $570-580/t fob but negotiable. Turkish rebar was available at $570-580/t fob and mesh-quality wire rod at $580-600/t fob depending on the supplier and tonnage. Moldova targeted the Romanian market at around €580/t delivered for wire rod. Asian wire rod offers were at $520/t fob and above, but tighter trade restrictions weighed on demand too.
