EU HRC trading activity subdued despite steelmaker discounts

Trading activity remained subdued in the European hot-rolled coil market Oct. 14 despite discounts from steelmakers.

High inventories with distributors, destocking by the year’s end, and subdued demand from end-consumers, including the automotive industry, have led to weak consumption.

“Demand is still low, we hear lower prices every day but in the end no deals closed,” a German distributor said. “There are rumors that prices will go down further, and stockholders and steel service centers are not motivated to place orders.”

Platts assessed Northwest HRC down Eur10 on the day at Eur670/mt ex-works Ruhr Oct. 14.

Northern European distributors estimated tradable value at Eur650-Eur700/mt ex-works Ruhr.

A German service center said maximum achievable prices are at Eur700/mt ex-works Ruhr.

A steelmaker cited tradable value at Eur650/mt ex-works Ruhr, and another mill said Eur650-Eur700/mt ex-works Ruhr.

A Central European buyer cited a deal with a German steelmaker at Eur700/mt ex-works Ruhr. Deals at that price were unlikely to be achieved in Germany, sources said.

“There is a glimpse of hope for the mills that demand could rebound as distributors would restock for the first quarter, but in reality, the stocks are still too high and this is not going to help the prices and order books,” a Northern European distributor said. “Raw materials are more expensive, and demand is low, nonetheless the mills keep furnaces running and they chose to decrease prices. But such approach will not solve the problem.”

In Southern Europe, Platts assessed domestic HRC down Eur15/mt day on day at Eur785/mt ex-works Italy.

The assessment was based on deals at Eur680-Eur690/mt ex-works Italy. Some buyers also cited tradable value at Eur650/mt ex-works.

Market participants said most European mills have already decreased HRC prices to the level below production costs and the negative trend is unlikely to end soon.

Platts assessed import HRC in Southern Europe stable on the day at Eur750/mt CIF Italian ports.

The assessment was based on offers heard at Eur650-Eur660/mt CIF Italy for material originating from Japan, South Korea, and Indonesia.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven