EU HRC market bearish on competitive import, slow demand

Market sources anticipate domestic hot-rolled coil price decline after European mills return to the market due to competitive import and sluggish demand, sources said April 20.

A majority of the European mills have been holding back from offers due to effects from technical issues and planned maintenances at some mills and overall full order books.

As a result, buyers have switched to purchases of import, which has been declining due to softening prices in Asia. As a result, the overseas HRC offers have been around Eur100/mt below domestic prices.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe at Eur840/mt ex-works Ruhr on April 20, unchanged day on day.

The assessment was based on tradable values heard at Eur830-850/mt ex-works Ruhr.

“It seems that the prices would move down to around Eur800/mt ex-works Ruhr, which would cover costs and allow margins,” a German service center said. “Import is adding pressure and the only reason behind domestic price stability is inactivity of the EU mills now.”

Platts assessed prices for imported hot-rolled coil in Northwest Europe at Eur720/mt ex-works Antwerp on April 20, down Eur10/mt day on day.

Offers of HRC from Asia have been heard at Eur710-730/mt CIF Antwerp. Offers from Turkey have been heard at Eur800/mt CIF Antwerp, including anti-dumping duties. Offers from Turkey have not been included into the assessment as buyers estimated them as too high.

“Mills believe that till July the prices will stay on approximately Eur850/mt ex-works [Northwest Europe],” a service center source said. “Reason is that they strongly believe that there will be a shortage because of the fire at the two ArcelorMittal-plants and their own stop of Tata Steel blast furnace. Our customers tell us that still all the service centers are full. This will create a hick-up for the coil flow. Customers do not load there products as fast as they are ready, service centers get full, mills cannot deliver to the service centers. So it looks that that the market slows down a little bit, and customers are afraid prices will go down.”

Platts assessed domestic prices for hot-rolled coil in South Europe at Eur835/mt ex-works Italy on April 20, down Eur10/mt day on day. Market participants estimated tradable values at Eur820-840/mt ex-works Italy.

Platts assessed prices for imported hot-rolled coil in the region at Eur700/mt ex-works Italy, unchanged day on day.

Offers for medium and smaller buyers have been heard at Eur700/mt CIF Italy.

Platts is part of S&P Global Commodity Insights.

Author Maria Tanatar, maria.tanatar@spglobal.com