European CRC, HDG slide on muted demand

Domestic prices for cold-rolled and hot-dipped galvanized coil dropped in Europe in the week to Oct. 26 due to low demand caused by combination of high stocks in the supply chain and a cautious end-consumer demand outlook.

Platts assessed North European CRC down Eur5/mt day on day and by Eur20/mt week on week, at Eur780/mt ex-works Ruhr.

Oct. 26. The assessment folllowed tradable values heard in the market.

Platts assessed HDG stable in Northern Europe at Eur820/mt ex-works Ruhr, down Eur30/mt week on week.

Market participants estimated achievable prices at Eur800-840/mt ex-works Ruhr — one source reported bids at sub-Eur800/mt ex-works Northern Europe.

“Nobody is really buying CRC,” a mill source said. “For HDG I think realistically the buyers would not pay much above Eur800/mt ex-works Northern Europe. But also, nobody is looking for big volumes. If someone needed it, they would have total control over the price as mills struggle to fill order books.”

Weak demand has been the main driver behind the negative trend in the European market. Distributors were reported to have high stocks of downstream coil booked earlier this year at higher prices, avoiding any restocking in the near term. Market participants expect that demand would not start to recover until first quarter of 2023.

Blast furnaces and downstream line production cuts have not been sufficient to bring balance to the market and tackle oversupply.

In addition, buyers have indicated that mills were able to give additional discounts on the recent decline of energy prices.

Platts assessed South European CRC down Eur10/mt on week, at Eur800/mt ex-works Italy Oct. 26, again following tradable value indications.

The assessment for domestic HDG in South Europe moved down by Eur20/mt week on week, to Eur820/mt ex-works Italy. Tradable value was heard at Eur800-830/mt ex-works Italy.

European steelmakers started negotiations with automotive customers for long-term contracts this week. So far, no agreement has been reached. Mills aim for fairly stable prices while automotive manufacturers target decreases of around Eur250-300/mt compared with previous contracts, driven by the declining spot market. Mills were also reported as looking to shorter-term contracts over yearly or half-yearly agreements due to market volatility.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven