EU HRC prices likely to soften in near term, sources say

European domestic hot-rolled coil prices are expected to soften in the near term due to low demand, caused by distributors’ healthy inventory levels and limited steel consumption, sources said Feb. 7.

Buyers focused on need-based procurement, prompting some mills to consider lowering offers.

Supplies increased after several idled blast furnaces came back online, while real demand remained muted.

“The buyers are not accepting current prices for coil,” a German service center source said. “It can only work for small tonnages for back-to-back trading. We will see a Eur25/mt decrease next week. I heard that the mills are considering price correction.”

Tradable values for domestic HRC were estimated at Eur710-770/mt ex-works Ruhr, with the majority of tradable values heard around Eur750/mt ex-works Ruhr. Offers were reported at Eur740-760/mt ex-works Ruhr.

Platts assessed the price of domestic hot-rolled coil in Northwest Europe down Eur5/mt on day at Eur745/mt ex-works Ruhr Feb. 7.

In South Europe, tradable values were estimated at Eur740-750/mt ex-works Italy.

Platts assessed the price of domestic HRC in South Europe down Eur5/mt at Eur745/mt ex-works Italy Feb. 7.

Interest in imports remained dull due to uncertainties about safeguard quotas for Q2 and Q3, which also made smaller buyers prefer domestic material.

Geopolitical conditions also pushed up freight rates, which impacted buyers’ sentiments.

“It is safer to buy material for shorter lead times from service centers as they are looking to destock, and competition is tough now,” another German service center source said.

Deals were reported at $710-$720/mt CIF Spain and at $700-$710/mt CIF Italy from Japanese mills.

Platts assessed the price of imported HRC in South Europe down Eur15/mt on the day at Eur660/mt CIF Italy Feb. 7.

Author Rituparna Nathrituparna.nath@spglobal.comMaria