EU HRC market activity low as buyers evaluate high offers

Trading activity in the European hot-rolled coil market was muted Sept. 1, with only a few deals settled in Northern Europe as buyers held back from trading as they evaluate high offers.

Platts assessed HRC in Northwest Europe at Eur760/mt ex-works Ruhr, down Eur20 from Aug. 31.

A Northern European producer reported deals at Eur750-Eur770/mt EXW. Two distributors reported unconfirmed transactions at Eur750-Eur760/mt and Eur750/mt, both EXW Ruhr. A third distributor said that a German mill sold HRC at Eur750/mt EXW, which a second producer confirmed as an achievable price.

Both buyers and sellers estimated tradable value at Eur750-Eur760/mt EXW Ruhr. One producer also said that workable prices will increase next week to the common offer level of Eur800/mt EXW Ruhr.

HRC offers in Northern Europe have been heard at Eur800-Eur850/mt EXW.

Most European coil producers increased offers at the end of last week-early this week by at least Eur100, with market participants resolute that further discounts should not yet be offered against the new price level to solidify the uptrend.

One producer, reporting deals at Eur750-Eur760/mt EXW, confirmed their intention to raise target prices week beginning Sept. 5, ceasing sales below Eur800/mt.

Overall transactional activity remained low, both on pre-existing factors driving down demand—namely high inventories and poor end-consumption—as well as a wait-and-see sentiment as buyers digest the effect of increased offers.

“Everyone has just returned to the market and is waiting to see where the realistic price level will be,” said a producer. “At the very least it seems clear that prices won’t decrease any further.”

“Demand is still low, and stocks are still high, but to be honest this increase was necessary,” said a distributor. “If not, demand would fall even lower as sentiment would be for further decrease. Some mills may settle a little lower but in general, the price increase is holding with mills across Europe in solidarity—hopefully, they stay strong.”

In Italy, trade was similarly muted, with offers heard at Eur800-Eur820/mt EXW. A deal was reported delivered into Central Europe at Eur800/mt, the equivalent of Eur740-Eur750/mt EXW Italy.

Platts assessed South European domestic HRC at Eur750/mt EXW Italy, down Eur20 on the day.

The Platts South European import HRC assessment also moved to daily frequency Sept. 1, to better reflect South European trade flows and relevant HRC supply chains.

Deals were reported for substantial tonnages to Italian buyers at Eur670-Eur675/mt CFR ex-India. Indian offers were then withdrawn from the market in anticipation of a price increase, according to trader sources. A Japanese supplier also sold significant volumes of HRC to Italy at Eur670/mt CFR Italy.

Offers of Asian HRC in Italy have been reported at Eur660-Eur680/mt CFR and in Spain at Eur710-Eur720/mt CFR.

“Given the rise in domestic offers, buyers could switch to import coil,” said a trader source. “Asian mills could review prices higher, but now European prices are up Eur100/mt—they can comfortably do so and still offer competitively.”

Platts assessed South European import HRC at Eur670/mt CIF Sept. 1.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar