The European hot-rolled coil market relaxed May 26 from the previous day’s increases, with most considering whether the downturn of Chinese prices will affect Europe, sources said.
The daily Platts HRC EXW Ruhr assessment remained stable at Eur1,132.50/mt, whereas the EXW Italy assessment dropped a slight Eur2.50/mt to Eur1,137.50/mt May 26 on lower indications from the market following a Eur40/mt hike the day prior.
Workable levels varied widely in the market, particularly for Italy where an Italian supplier said there would still be possibilities as low as Eur1,080/mt EXW as the bottom, even though official offers were above Eur1,100/mt. Other sources, including buy side and sell side, said that prices would overall range between Eur1,100 and Eur1,150/mt EXW, with most putting the midpoint at or above Eur1,125-1,130/mt.
In general terms for the European market, sources said that the shorter the delivery time, the higher the price. Few Italian or Northwest European mills were heard to offer earlier than November delivery.
“The shortage is still [a] key element in this,” a Benelux SSC source said, adding that the problem would be securing material.
“We are negotiating end of year, in a few months 2021 will be over from our purchasing point of view,” the source said, suggesting that other SSCs would have a similar strategy which could mean that prices could stabilize for a period until buyers are fully ready to start requesting first-quarter volumes.
“In September, when we start negotiations for Q1, we might see the same pricing enthusiasm [as seen in the past months],” the source added.
One European mill source said that China had a “mini-bubble” driven by speculation, which had burst now, which will however not necessarily mean that Europe should be affected as fundamentals in China as well as Europe have not changed.
— Laura Varriale