EU Flat Steel Summary by Argus Media

Northwest European hot-rolled coil prices edged up over the past week, but there is much uncertainty over real consumption over the rest of the year.

Argus’ daily northwest European HRC index was €632.50/t on 23 August, up €3.25/t from 6 August. In Italy activity is only just restarting after the summer break, with many participants still out on holiday. Argus’ daily Italian HRC index slipped from €631.75/t on 16 August to €630.25/t on 23 August.

One Italian mill has still been offering September delivery coil at €640/t delivered base to some service centres in the past week. This has spooked some, given September is not far away. Shorter lead times make it harder to mills to remain firm on price.

One leading European producer has announced €700/t ex-works to some customers in the last few days, although it is not necessarily a unified offer just yet. Other steelmakers are expected to table higher quotes in response.

However, demand is the big concern.

Service centres in Germany and Italy report low appetite from end-users, with some buyers cutting their volume budgets by 20-30pc. As a result coil stocks are starting to increase with German service centres, despite their destocking attempts amid high financing costs. The stock-to-sales ratio for cold-rolled coil reached three months in July, the highest level since last December.

Even steelmakers concede there has, as of yet, been little sign of any September restock. But they hope the increase announcements spark some apparent demand, prompting a stronger buying cycle.