European CRC, HDG prices supported by limited restocking; real demand remains subdued

The domestic prices for downstream flat steel products in Europe were stable to slightly higher in the week to Wednesday November 22, despite producers’ push for substantial rises, sources told Fastmarkets.

Slow end-user demand was the principal factor dragging on European domestic cold-rolled coil and hot-dip galvanized coil prices, sources said.

However, restocking and a lower supply due to output cuts allowed European mills to get small gains in CRC and HDG trading in November.

European producers were also busy negotiating long-term contracts with end users for the first half of 2024, and were said to be looking for €750 ($820) per tonne for hot-rolled coil — feedstock for CRC production — and €850 per tonne for HDG coil, in line with flat steel contracts for the second half of 2023.

“Mills want to push the spot market higher, in line with automotive contracts,” a trading source said.

In Northern Europe, local producers were offering around €770-780 per tonne ex-works for CRC and €790-800 per tonne ex-works for HDG.

Deals, however, were reported at lower levels — at €750-755 per tonne ex-works for CRC and €770 per tonne ex-works for HDG.

Lead times for both products were minimum 8 weeks, sources said.

Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €750-755 per tonne on Wednesday, up by €5-10 per tonne from €740-750 per tonne seven days earlier.

And the corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €770-780 per tonne on Wednesday, narrowing upward by €20 per tonne from €750-780 per tonne in the same comparison.

Meanwhile, competitive offers from overseas suppliers were putting additional pressure on European prices. The strengthening of the euro against the US dollar has also made import more attractive recently.

The currency strengthened to $1.094 per €1 on November 22, compared with $1.077 per €1 on November 15, according to currency exchange website Oanda.

A transaction for a limited tonnage of Japan-origin coil with end-January shipment was reported at around €695-699 per tonne CFR to Southern Europe during the assessment week.

Suppliers from South Korea reportedly withdrew from the market and were expected to come back with higher offers shortly. Price ideas were no lower than €710-730 per tonne CFR to Europe for February shipment.

Turkish suppliers, however, were able to offer December shipment, January delivery CRC at €710 per tonne CFR.

A Vietnamese supplier was offering $840-850 per tonne CFR for 0.5mm HDG with Z140 coating for late January shipment.

Published by: Julia Bolotova