Market sources reported expectations of a pricing downtrend for hot-rolled coil April 25, as demand remained reduced off the back of the holiday period.
Sources in Northern Europe reported a quiet market with muted demand on the day, with most preferring to wait and see whether prices would correct in resistance to restocking at current levels.
“Everyone is expecting price decreases, so we’ve had hardly any enquiries,” one mill source said. “Buyers prefer to wait – most are looking toward Q3 – we may see buyers return next week to order for June but its difficult to forecast at the moment.”
When asked about price direction, the same source said production costs were too high for a collapse, and that producers would elect to reduce production rather than slash offer levels.
However, other market sources disagreed that mills would reduce production.
“Mill can decrease the prices, and they will, but I don’t think they’ll cut production yet as the current price decline doesn’t justify it,” a service center source said.
“Prices are overheated,” a trader said. “Yes, mills have higher costs, but not so much as to increase prices by what they have.”
The trader also reported mills were ready to accept lower bids, if at reasonable volumes.
Sources confirmed demand was much reduced, especially from the automotive industry, with expectations mixed as to the return of the sector. A second trader reported potential pickup toward the end of May from one OEM, whereas a second service center source said there was no hope for the automotive industry to recover this year.
Multiple sources reported a need for prices to soften further to stimulate demand, considering a maximum tradable value at Eur1,200/mt ex-works.
HRC in Northern Europe was assessed down Eur15 on the day at Eur1,310/mt ex-works Ruhr. HRC in Italy was stable April 25 at Eur1,250/mt.
— Benjamin Steven