EU mills give discounts for December delivery HRC, aim for higher prices in Q1

European steelmakers have continued to offer December delivery hot-rolled coil Oct. 19 in an attempt to secure sales in a slow market.

For January-February delivery, however, some mills have been offering higher prices, and others have been holding back from price announcements for the first quarter of next year.

Platts assessed hot-rolled coil in Northwest Europe up Eur10 on the day to Eur660/mt ex-works Ruhr Oct. 19.

In North Europe, offers and tradable value for December delivery hot-rolled coil have been heard at Eur700/mt delivered from the region’s mills, the equivalent of Eur650-670/mt ex-works Northern Europe. Market participants estimated delivery costs at Eur20-50/mt depending on logistics.

One source estimated achievable prices at Eur630-650/mt ex-works Ruhr, but the lower end of the range has not been confirmed in the market.

An Italian trader reported an unconfirmed deal for German-origin HRC at Eur710/mt delivered Northern Europe, the equivalent of around Eur770-780/mt ex-works Ruhr.

Demand for coil delivered this year has been close to zero as buyers have been focused on destocking by year-end, following the traditional cycle. For January delivery, however, the situation might improve, sources said.

For first-quarter delivery, North European mills have been aiming for Eur750-760/mt delivered, the equivalent of Eur700-750/mt ex-works Ruhr based on transportation costs of Eur10-50/mt.

“I think that coil prices will rise again next year,” a steelmaker said. “So, for December delivery we have been accepting Eur700/mt delivered for HRC, but we refused a request for the material at the same price for January delivery.”

Demand across the European market remained low due to both reduced steel consumption of end-users and sufficient stocks of distributors. Declining coil prices in Europe have also not supported demand of distributors as they prefer to hold back from making new deals until prices reach bottom.

“Even those who need material now are delaying purchases as they believe prices could slide further down,” a Southern European service center source said. “This puts mills under pressure to cut prices to make deals to fill order books. And that makes buyers believe that prices have not reached bottom.”

A pipemaker source agreed, saying: “Situation is still complicated. Buyers that need to restock prefer to wait, and others just have too much coil in stock. And prices have been moving down, so the buyers also do not want to lose money. They have already had to sell coil for lower prices than they booked them.”

In South Europe, mills have had limited volumes to offer as they preferred to keep production rates under control in an attempt to support prices.

“Italian mills prefer not to sell coil to giving discounts that would not help the sales but would stress the market,” a distributor said.

Platts assessed HRC in Italy up Eur5 on day to Eur690/mt ex-works Oct. 19.

The assessment was based on the lower end of offers reported at Eur700-720/mt delivered and at Eur700-720/mt ex-works.

A European steelmaker was reported to offer HRC to export markets, notably Turkey at Eur650/mt CIF, in a bid to reduce domestic availability and to fill order books.

Import prices for HRC in Europe have moved down due to lower offers from Taiwan.

Platts assessed import HRC in Southern Europe down Eur20/mt on the day at Eur630/mt CIF Italian ports.

Two sources reported offers for HRC from Taiwan at Eur620/mt CIF Italy. One of them said buyers have been sending bids at Eur600-610/mt CIF Italy.

A trader indicated offers at Eur620-640/mt CIF Italy for the material from Asia.

And an Italian source said that prices of Eur620/mt CIF Italy were available only to big buyers and that offers for HRC from Asia were at Eur640-660/mt CIF Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven