European domestic prices for hot-rolled coil remained stable on Sept. 23 due to limited trading activity caused by distributors’ high stocks and slow demand from end consumers.
In addition, high production costs have restricted steelmakers’ ability to give discounts.
Reduced production rates and some equipment stoppages implemented by European producers, including ArcelorMittal, Arvedi and Liberty Steel, have not been sufficient to balance reduced supply and demand. Market participants expected that more steelmakers would choose to stop equipment to support domestic prices.
“It is only a matter of time before we will see more capacity shutdowns, as demand is weak and it will take time before distributors manage to decrease their coil stocks,” a Northern Europe-based source said.
Meanwhile, a steelmaker said that, with each furnace stopped, supply and demand get closer to a balance.
“I think that mills will stop more meltshops and more producers will choose to temporarily idle rolling capacities,” the steelmaker said.
Platts assessed hot-rolled coil in Northwest Europe at Eur735/mt ex-works Ruhr on Sept. 23, unchanged day on day.
German mills have held prices for buyers within the country at Eur750-760/mt ex-works Ruhr minimum. However, some mills have been trading in other European countries at Eur700-730/mt ex-works Ruhr.
Such strategy allowed the mills to protect prices in Germany and also not to cause further drops in other countries. Taking into the account the delivery costs, the prices have been close to those available from local mills, sources said.
Platts assessed hot-rolled coil in southern Europe stable on day at Eur750/mt ex-works Italy Sept. 23. The assessment was based on offers and achievable prices heard at Eur740-780/mt ex-works Italy.
Platts assessed South European imported HRC at Eur710/mt CIF on Sept. 23, unchanged on the day.
The majority of the market sources reported offers for HRC from Asia and Turkey, including anti-dumping duties, at Eur700-730/mt CIF Italy. One source, however, said that Far East mills have reduced offers to Eur670-680/mt CIF Italy. The information has not been widely confirmed in the market.
Platts is part of S&P Global Commodity Insights.
— Maria Tanatar
