European hot rolled coil prices were flat Jan. 31, with market participants remaining mixed about the longevity of increased price levels as demand sentiment remained largely mixed.
Market sources reported tradable ranges of Eur580-600/mt ex-works Ruhr, citing the generally sideways conditions for price levels in North Europe, but reiterated how a large section of the market was growing more bullish against the backdrop of higher mill offers.
“The market is going up, driven by restocking and even mills that sell to automotive are seeing an increase in volumes,” said one German buyer. “But it is still not clear what the real consumption is, and some construction applications may only begin to pick up in Q2 or after the summer.”
Other sources argued against the bullish trends in the market, citing a continuation of high stock levels and uncertainty in the end-consumer market. “Service centers and cold rollers are sitting on huge stocks, so I’m not sure mills can get prices above Eur650/mt,” a second buyer said.
“We don’t see improvements to price levels at the moment, inventory levels are still high and there are still large volumes flowing into Antwerp,” a service-center source said. “Looking at real demand, I just don’t see an increase or prices going up, just sentiment.”
The same source reported a normalized HRC import price level of Eur575/mt CIF Antwerp, saying that compared to current EU-mill offers, prices remained competitive. Nonetheless, a large number of market participants have continued to stress a preference for domestic material, due to the recent trend of higher import offers, in part worsened by a volatile foreign exchange rate between the euro and the US dollar.
Conversations around European mill order books remained largely positive, as sources reported that several were at volume capacity until after March, and were not in a hurry to sell, despite the continued reports of higher stock levels further down the value chain.
A source from an EU mill argued that domestic production remained preferable to the import market. “Antidumping investigations are helping keep buyers on domestic,” the source said. “Imports offers are not competitive, and you can get better quality material, and clearer lead times if you buy domestically.”
“The problem at the moment is uncertainty across the market, so while prices are inching up and order intake is healthy, there is still too much uncertainty from politics.”
A second mill source said demand was stagnating, but “coil producers are absolutely in control, as Q1 is pretty much covered, so no producer is under pressure to sell cheap.”
Platts assessed the North European domestic HRC price at Eur590/mt ex-works Ruhr, and the Southern European domestic HRC price at Eur585/mt ex-works Italy, both stable on the day.
Platts assessed imported HRC prices in Northwest Europe and Southern Europe, at Eur545/mt CIF Antwerp and Eur545/mt CIF Italy, respectively, with both also remaining flat on the day.