EU steelmakers target HRC price rise on improving restocking activity

European steelmakers have been aiming for higher domestic hot-rolled coil prices on Dec. 7 as they expect demand to improve in the first quarter due to restocking.

Although some big producers have not officially moved prices up, they refused to give discounts, sources said.

The rising mood of the mills has been supported by anticipated restocking of distributors across Europe, the need to cover high production costs and the withdrawal of competitive import offers from the market this week.

Trading activity, however, has been restricted as distributors continued to focus on destocking by the year-end and the buyers have been evaluating end-user demand before making deals, according to market sources.

“It is expected that coil prices will go up in the first quarter, latest in the second quarter – but there are still no big deals done,” a German distributor said. “I guess customers are aware that prices will go up, but still hesitate to buy due to unclear demand.”

“Mills are holding back from sales, as they understand that the longer they wait the better the chances to get higher prices,” a German service-center source said. “Buyers are trying to talk prices down, but it seems that they do not have control over prices now.”

Platts assessed HRC in Northwest Europe at Eur615/mt ex-works Ruhr Dec. 7, up Eur5/mt day on day.

Distribution sources reported tradable value at Eur620/mt ex-works Ruhr. One distributor reported tradable value lower at Eur610-620/mt ex-works Ruhr. Another reported Eur620/mt ex-works Ruhr as a minimum price.

Official offers have been heard at Eur650/mt ex-works Ruhr.

Platts assessed domestic HRC in the south of Europe stable at Eur620/mt ex-works Italy Dec. 7.

The assessment was based on offers heard at Eur620-650/mt ex-works.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven