EU hot-rolled coil (HRC) prices decreased today, but the downtrend is probably temporary as structural undersupply is expected to guide prices in the second half of the year, market participants said.
The extent of the supply deficit will depend on how much idled EU capacity is brought back on line, as well as how restrictive and usable the bloc’s new steel import quotas are.
Buying activity has slowed but supply-side fundamentals are tight, market participants said. Mills have had to discount over the past weeks to account for persistently high inventories across the supply chain.
The Argus daily northwest Europe HRC index slipped by €0.25/t (30¢/t) to €695.75/t ex-works, while the Italian index decreased by the same amount to €692/t ex-works.
A northwest European service centre booked 5,000t of HRC at €705/t base delivered at the end of last week. Traders indicated €700/t ex-works was possible for remaining second-quarter supplies. A transaction was reported at €730/t delivered, but no further details were given.
Mills are currently indicating third-quarter deliveries, tabling offers at €740-760/t base delivered northwest Europe. There is still little to no interest in these prices at the moment, a trader said.
In Italy, €710/t base delivered is achievable, market participants said. Import stock sold at €695/t ddp Italy, a trader said. A different trader offered at €690-695/t ddp across Europe, while another said €670-680/t ddp Italy was possible for stocks. In northwest Europe, a trader offered stock material at €680/t fca, while clients counter-offered at €30-40/t below this level.
“It is difficult to see how steel prices won’t increase further, as imports are almost non-existent,” a trader said. The full impact of the Middle East conflict has not yet been felt in Europe, the trader added. “I think mills are positioning for a price rise,” another trader said. Other market participants echoed this sentiment .
An Indonesian supplier continued to offer at around $595-600/t fob but did not receive any bids. A major Indian mill was off-market for HRC and kept its cold-rolled coil (CRC) offer at €685/t cif Italy. A Turkish deal for HRC concluded at $620/t fob to Italy, which would equate to around €580-590/t cif with dumping included. Deals also concluded for smaller quantities from a Turkish supplier at a slight premium, with some offers coming in at $630-640/t fob for shipment at the end of the second quarter and into the third.
The Argus twice weekly cif Italy assessment held flat at €585/t. Both of Argus‘ CRC assessments fell today, with the daily northwest Europe marker down by €10/t to €800/t ex-works, and the weekly Italian marker decreasing by €7.50/t to €807.50/t ex-works.
Prices in the northwest European market were heard as low as €800-810/t base delivered, while prices in Italy were in a wide range over the past week. Some offers were still pegged at €830-840/t base delivered, but transactable levels stood lower at €820-830/t. A seller reported €790-800/t as attainable. A sale for Chinese CRC took place at just under €800/t ddp Italy, while a South Korean supplier continued to offer at a steep premium, attracting limited interest.
