European HRC buyers await higher offers; slow demand remains key issue

Prices for domestic hot-rolled coil were broadly stable on Thursday June 6; sources expected mills to seek higher prices following safeguards review, however weak end-user demand remained a concern, Fastmarkets heard.

Buyers in Europe continued to refrain from restocking, opting for hand-to-mouth bookings while assessing the market situation.

Safeguards news indeed flustered the market. But it’s too early to draw a conclusion. The problem, however, is in low production of new cars [in Europe]. If that continues, end-user demand will remain weak,” a buyer source in Northern Europe said.

“Demand [from end-users] remains on the low side, so getting higher [HRC] prices just based on expected safeguards effects would be difficult,” a second buyer said.

Meanwhile, suppliers in Northern Europe were either keeping quiet, or opting for minor upward price adjustments, testing the market.

An integrated mill from the Benelux area was offering July delivery HRC at €650 ($707) per tonne ex-works, versus €640 per tonne ex-works in the previous week.

In Germany, integrated mills were heard offering July-delivery coil at €640-650 per tonne delivered, which nets back to about €630-640 per tonne ex-works.

An offer was heard for July-August delivery HRC from a Benelux-based re-roller at €620 per tonne ex-works. Lower offer levels, previously reported by buyer sources at €600 per tonne ex-works, were not widely confirmed.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €633.75 per tonne on Thursday, up marginally by €1 per tonne day on day from €632.75 per tonne.

The index was stable week on week, but down by €7.50 per tonne month on month.

Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €630.52 per tonne on Thursday, down negligibly €0.11 per tonne from €630.63 per tonne the previous day.

The index was up by €0.52 per tonne week on week but down by €3.23 per tonne month on month.

The Italian HRC market was also broadly stable.

“Spot demand is soft; buyers are only filling gaps in stocks, no major activity. But mills seem to be defending current price levels and are not willing to step much lower. Limited import options can be supportive for [European steelmakers] in a longer run,” a buyer in Italy said.

Tradeable prices were heard at around €640-650 per tonne delivered from buyers and sellers, which nets back to €630-640 per tonne ex-works.

Transactions for small tonnages of HRC in Italy were heard at €630 per tonne ex-works.

Lead times from local and European mills were around four to five weeks.

In the secondary market, 3-6 mm HR sheet was still traded within the range of €700-730 per tonne CPT, with most trades around €720-730 per tonne CPT, Fastmarkets understands.

Steel service centers’ attempts to increase prices for HR sheets during May were largely unsuccessful due to slow end-user demand, sources said.

No new import offers were heard from Asia after the safeguards review announcement.

“Nobody is willing to buy import [HRC] because of the long lead times. Some buyers opt for imports only to mitigate the risk that EU-mils do not deliver/take production out of the market,” a buyer in Europe said.

So far, Turkey was the major “safe origin” for European buyers. In the past week offers for Turkish HRC with end-July shipment were reported at €600-610 per tonne CFR, including the anti-dumping duty.

Published by: Julia Bolotova