European coils market cautious about cheap imports as auto a ‘bright spot’

European hot-rolled coil steel prices were stable Jan. 6 after the holiday period amid high energy and transport costs, causing great pricing uncertainty for Q1. Sentiment remained mixed about how quickly automotive demand will return, with some buyers still cautious about a price decrease in the face of cheaper import prices, sources told S&P Global Platts.

An HRC import offer price was heard before Christmas at Eur800/mt CIF Antwerp ex-Asia, now updated to HRC Eur750-780/mt CIF Antwerp ex-Korea. A cold-rolled coil import offer stood at Eur880-890/mt CIF Antwerp ex-Asia.

“Domestic players don’t have a choice but to react to cheap import prices,” a German trader said.

The source was still pessimistic about a potential price increase despite a surge in automotive demand, with some original equipment manufacturers now restarting after a production slump.

“Auto is definitely a bright spot, but I’m more pessimistic because prices are sliding down every week — drops are more than Eur20/mt,” the trader said regarding the import market.

On the mill side, a European producer was confident about an uptick in demand from the manufacturing industry, with the Benelux region struggling amid shortened workforces.

“It’s a sign that business is rolling — they’re actively seeking people,” the mill source said.

He added that European car dealerships had reported full order books and were simply waiting for more stock from factories.

“It’s a sign that as long as automotive has cars to deliver, they will sell,” the mill source said.

The EU Commission’s revision of the import safeguards system Jan. 10 could spell further trouble for European players, with the same trading source expecting protectionism to tighten.

Mills looking to export sufficient steel quantities could also face a shortage of available ships, the source warned.

— Amanda Flint