EU HRC transaction prices rise, mills aim for further increases

  • Two mills to restart blast furnaces in Germany
  • Mills aim for stable first-half 2024 contracts

Northwest European domestic transaction prices for hot-rolled coil increased on Nov. 8, while steelmakers tried to achieve further increases.

Northwest European mills made deals at Eur645-650/mt ex-works Ruhr and Eur650-660/mt ex-works Northwest Europe. Tradable values were heard at Eur630-650/mt ex-works Ruhr.

Official offers were reported at Eur680-700/mt ex-works Northwest Europe, and some sources said that the mills were planning to increase offers above Eur700/mt ex-works Northwest Europe.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe up by Eur10 on the day to Eur645/mt ex-works Ruhr on Nov. 8.

Production cuts implemented by majority of the Europe-based steelmakers played a major role in the price recovery. The bullish market mood, however, was fragile due to generally bearish view of the buyers on the real demand and concerns about flat furnaces restarting in Germany this year and in the first quarter of 2024.

“We will focus on back to back business, it makes no sense to build stocks with more expensive coil when real consumption is struggling,” a Germany-based service center source said.

Although distributors recognized that mills need to achieve higher prices to cover rising production costs, they also did not want to risk building stocks with more expensive coil. Some market participants believed that the steelmakers would rather close more capacities than they would allow price fall.

“With current prices every mill is losing money, so price rise is inevitable,” a mill source said. “Although there are doubts among the buyers if the price rise would be sustainable, the mills have no other choice.”

In addition, mills have been targeting settled contracts for the first half of 2024, with end-users at unchanged prices compared with 2023, despite the decrease of spot prices in the second half of this year. The steelmakers have been aiming for prices around Eur750/mt ex-works Ruhr for HRC and for about Eur850/mt ex-works Ruhr for hot-dipped galvanized coil. Buyers from the automotive industry have been expecting contracts to be settled about Eur100/mt below those prices.

“Carmakers have postponed some volumes they originally requested for the fourth quarter into the first quarter [of 2024] because they expected prices to go down,” a second service center source said. “Which gave mills a good argument to increase prices as now they have good order books for the beginning of next year.”

Author Maria

Platts is part of S&P Global Commodity Insights.