European CRC, HDG producers mull higher prices

European steelmakers intend to increase prices for downstream flat steel, while buyers are unconvinced about a strong rebound due to still-weak demand from end users, Fastmarkets heard on Wednesday August 30.

Firm offers for cold-rolled and hot-dip galvanized coil were still rare in Europe, because the market has not fully restarted after the summer holidays.

But mills were reportedly aiming for price rises, expecting restocking activity to support a rebound.

“The level of inventories is low across the entire supply chain; buyers will come back for volumes in September,” a mill source told Fastmarkets.

Buyer estimates of tradable values were between €750 ($811) and €770 per tonne ex-works for CRC and around €780-790 per tonne ex-works for HDG in Northern Europe.

One mill indicated a price idea for CRC at €800 per tonne EXW and around €800-810 per tonne for HDG.

But still-weak demand from end-use sectors, including automotive and construction, was the major stumbling block for a sustainable price rise, market sources said.

At the same time, European mills are said to be experiencing delays with their deliveries, especially for HDG, with delays reportedly at a minimum of 1-2 weeks from “practically all mills,” several trading sources told Fastmarkets.

European producers were also said to be trimming output, running “production campaigns for coated coils,” sources said.

“Mills run their HDG mills on demand, fulfilling the order, and then stop for 1-2 weeks. That means availability is reduced,” a trader in Germany said.

This was also due to a change in buying attitude because nowadays buyers prefer to book “strictly what they need and maintain stocks at low levels due to high market volatility,” another trader noted.

Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe, was €750-770 per tonne on Wednesday, widening up by €10 per tonne from €750-760 per tonne on August 23.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe, was €780-800 per tonne on Wednesday, unchanged since July 26.

Import offers for CRC and HDG to Europe were rather limited in the assessment week, sources said.

Most overseas suppliers were offering material for shipment in mid-October/early November, which would mean arrival would be in November and December.

One mill from South Korea was offering CRC to Southern Europe at €685 per tonne CFR, with a transaction reported at this level about 10 days ago.

Japan-origin CRC was on offer to Southern Europe at €700-710 per tonne CFR.

A Vietnamese supplier was said to be aiming for $830-840 per tonne CFR for 0.5mm HDG with z100-120 coating, for October shipment.

Published by: Julia Bolotova