European downstream flat steel prices stabilize

Cold-rolled and hot-dip galvanized coil prices in Europe remained broadly stable in the week to Wednesday July 6 amid a partial pick-up in demand, market sources told Fastmarkets. Flat steel producers in Northern Europe reported a slight improvement in demand from automotive original equipment manufacturers (OEMs) over the past week.

Notably, there were more inquiries from end users in the automotive industry for September-delivery material, with some restocking expected in the second half of July, according to market sources.

“The automotive producers are actually well-booked; they need material to keep them going,” a seller in Germany told Fastmarkets.

Potential restocking was supposed to end the price downtrend, which has been persisting in the market for the past couple of months.

“Producers still have some unsold tonnages of [downstream flat steel] for July and August, the market is still oversupplied. However, we do not expect [CRC and HDG] prices to drop significantly below current levels because of the costs [and] unclear post-holiday prospects,” a producer source in Italy told Fastmarkets.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe was €950-980 ($981-1012) per tonne on Wednesday, unchanged from a week earlier.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe was also unchanged week on week at €1,000-1,020 per tonne on Wednesday.

Both assessments were based on market sources’ estimations of achievable prices and lower offers heard from buyers and producers during the reported week.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Southern Europe was €860-870 per tonne on Wednesday, narrowing downward by €10 per tonne from €860-880 per tonne a week earlier.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Southern Europe was €880-890 per tonne on Wednesday, narrowing downward by €10 per tonne from €880-900 per tonne last week.

Post-holiday outlook
Market expectations for September-October were quite mixed due to prevailing uncertainty in the energy sector, Fastmarkets heard.

Should Russia cut off gas supply to Europe completely in the fourth quarter of 2022, energy prices will go “through the roof” and European mills will need to adjust or even halt their operations, sources said.

At the same time, automotive demand was expected to pick up in the final quarter of the year, from the lows seen in the first half of the year, with some automakers in Germany even announcing planned production increases in September.

Market sources see the combination of reduced supply and improved demand as having the potential to provide flat steel prices with a boost in the final three months of 2022.

Published by: Julia Bolotova