Upwards sentiment strengthened in the European hot-rolled coil market on July 8, supported by production cuts in the EU and rise of import offers.
In addition, demand has started to gradually recover and a majority of buyers are expected to restock by the end of July.
“Restcoking has to start in July,” a Northern European distributor said. “Sooner or later it will be possible to see a floor of a warehouse, and you do not want that so there will be restocking, distribitors need material for September.”
Platts assessed HRC in Northern Europe at Eur850/mt ex-works Ruhr July 8, unchanged day on day, according to S&P Global Commodity Insights data.
A majority of sources reported tradable value of Eur850/mt ex-works Ruhr. Some market participants said that prices of Eur825-870/mt ex-works Ruhr could be achieved.
“Majority of distributors believe that prices have reached bottom,” a German source said. “Mills either accept firm bids or engage in discussions with reliable clients. Exporters also increased offers. This, combined with production cuts in Europe changed the trend, and we will see price recovery soon.”
HRC in Southern Europe was assessed at Eur770/mt ex-works Italy July 8, also unchanged day on day.
Italian mills have been offering HRC at Eur800/mt ex-works. Some deals with pipemakers have been settled at Eur730-750/mt ex-works earlier this week. As a result, market participants estimated achievable prices at Eur750-800/mt ex-works for spot buyers.
A majority of European steelmakers have been cutting output to balance supply with lower demand. Producers plan longer summer maintenances – some plan to stop blast furnaces.
One Central European producer has also started to offer slab in the EU spot market to cut supply of coil, sources said.
Import offers of HRC from Asia into Northern Europe have been reported at Eur780/mt CFR Antwerp, up by about Eur20-30/mt from the previous offers, sources said.
— Maria Tanatar, Benjamin Steven