EU HRC prices inch up on slow demand revival, production cuts

Domestic hot-rolled coil prices inched up across Europe on July 12 as buyers gradually started restocking and as mills cut output.

Platts assessed HRC in Northern Europe at Eur855/mt ex-works Ruhr July 12, up by Eur5 day on day, according to S&P Global Commodity Insights data.

A producer reported deals settled between German mills and buyers at Eur850/mt ex-works Ruhr and a transaction for HRC from other Northern European steelmaker at the equivalent of Eur850-860/mt ex-works. Another source reported deals at the equivalent of Eur855/mt ex-works.

Tradable value was reported at Eur850-860/mt ex-works Ruhr/Northern Europe.

One steelmaker was reported to have moved its HRC offers up to Eur890-900/mt ex-works Northern Europe, and market sources expected that other producers would follow.

Northern European buyers were expected to start restocking for September by the end of July. Although demand had not jumped, market sources noted that more buyers have been interested in making deals.

“Demand is not booming, but it is visibly better as buyers realized that the prices have reached bottom,” a producer said.

“The market seems to reach the lowest price at which the buyers realized that they would not get lower prices,” another source said. “If prices moved down further the mills would have been in trouble due to high costs.”

Some European steelmakers, including HBIS Serbia, Acciaierie d’Italia and ArcelorMittal Dunkirk in France, have planned blast furnace stoppages in July-August to balance supply and demand. Italian electric-arc furnace-based producer Arvedi also planned to fully stop its Cremona mill for the month of August. ArcelorMittal Bremen in Germany has introduced short-time work.

Other steelmakers were reported to operate at minimum production rates and plan longer summer maintenances.

The reduction of flat steel output supported the domestic prices, sources said.

In addition, car manufacturers were reported to show a higher interest in flat steel, according to some market participants.

HRC in Southern Europe was assessed at Eur775/mt ex-works Italy July 12, also up by Eur5 day on day.

Official offers have been reported at Eur800/mt ex-works Italy, and achievable prices have been evaluated by market sources at Eur750-800/mt ex-works Italy. A source reported an offer of HRC at Eur750/mt ex-works, but the information was not widely confirmed.

Unlike distributors in Germany, Italian buyers planned to wait until late August-early September for restocking, following the traditional market cycle, sources said.

“Stocks in Italy are not as high as those in Germany,” a trader said. “So the fact that Italian buyers prefer to wait might result in a problem in September due to effects from production cuts.”

— Maria Tanatar