Prices for steel hot-rolled coil in the Northern European and Italian domestic markets edged upward on Monday July 13, with deal prices unusually aligned in both regions.
This was driven by the tighter import availability, which has had a stronger effect on market conditions in Southern Europe, trade sources told Fastmarkets on Monday.
Normally, HRC deal prices in Italy were at least €10-20 per tonne below those in Northern Europe. After the new EU import quotas came into force on July 1, market participants said that European producers, including Italian and German mills, were pushing for higher prices, but buyers were resisting the increases.
In Northern Europe, offers were reported in the range of €700-740 ($800-846) per tonne ex-works for September-October delivery, but no tonnages were traded due to limited buying at those prices.
A buyer reported an indication of workable prices at €700-710 per tonne ex-works, saying that “price and quantity expectations for September onward are positive,” while adding that most market participants were refraining from third-country imports.
A second buyer reported a deal at €710 per tonne ex-works and added that “activity seems to be picking up, with a rare but understandable situation where [the] South is doing better than the North,” explained by Southern Europe’s greater dependence on imported HRC.
A third buyer reported an offer from a major producer at €740 per tonne delivered (€725 per tonne ex-works) for September-October delivery, with no tonnage traded due to the same lack of buying interest. The same producer was offering HRC at €770 per tonne delivered (€755 per tonne ex-works) in Southern Europe, driven by stronger market dynamics.
The same buyer source also reported HRC offers in Germany at €700-720 per tonne ex-works for October delivery. These were included in the index because they were in line with the latest deals heard in the market.
Some price points fell outside Fastmarkets’ methodology standard delivery window (as long as six weeks) but were considered in the index because no offers for earlier-delivery material were heard in the market.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe, was calculated at €708.33 per tonne on July 13, up by €3.33 per tonne from €705.00 per tonne on July 10.
The index was up by €15.20 per tonne week on week and up by €23.12 per tonne month on month.
In Italy, a supplier reported concluding some transactions at €710 per tonne ex-works for material scheduled for September delivery. This was up from previous deals reported at €685-690 per tonne ex-works on July 6.
Meanwhile, a buyer said on Monday that mills were pushing for higher prices and reported that workable offers were “no lower than €700 per tonne ex-works,” while buyers’ target prices for September-delivery material remained at €670-690 per tonne ex-works, depending on order volume.
As a result, Fastmarkets’ assessment of the daily steel hot-rolled coil index domestic, exw Italy, was €695.21 per tonne on Monday, up by €2.40 per tonne from €692.81 per tonne on Friday.
The index was up by €16.46 per tonne week on week and up by €7.71 per tonne month on month.
Trade sources said that HRC import activity has remained subdued despite the tightening supply outlook, but reported a potential booking from a major Italian buyer for 30,000-40,000 tonnes of Indian HRC around €570 per tonne CFR on Monday.
Author: Ivelina Nikolova
