Only hand-to-mouth trading was reported in the European hot-rolled coil market on Tuesday June 6, Fastmarkets understands, with buyers holding back in the expectation that prices will fall further as June progresses.In Northern Europe, distributors and stockholders were only purchasing small tonnages of coil to cover gaps in stocks of specific grades or sizes, sources said.
Buyers said they had enough material in stock and could therefore afford to hold back from restocking for a little longer. They added that they expected prices to hit the floor at some point in June.
“The level of stock at distributors and stockholders is still quite high, while [HRC prices] keep falling – so, not a good time for restocking,” a distributor in the region said. “Besides, negotiations with the automotive [sector] for the second-half of 2023 are still not finalized,” the source added.
Expectations regarding the price floor varied, however.
Some buyers expect HRC prices in the region to stabilize at around €650 ($695) per tonne EXW, while other suggested that €700 per tonne EXW would be the cost line for the producers.
The latest offers from integrated mills in Northern Europe came in at €720-740 per tonne EXW, for August-September delivery HRC, while Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €721.04 ($771.56) per tonne on Tuesday, down by €2.29 per tonne from €723.33 per tonne on Monday.
The latest calculation of the Northern European index was down by €27.09 per tonne week on week and by €100.59 per tonne month on month.
Fastmarkets’ corresponding daily steel HRC index, domestic, exw Italy was calculated at €667.50 per tonne on Tuesday, down by €2.50 per tonne from €670.00 per tonne on Monday.
The index was down by €13.13 per tonne week on week and by €132.50 per tonne month on month.
Buyer sources in Italy said that local mills were will to sell at €670-680 per tonne CPT, which would net back to €650-660 per tonne EXW, for July-August delivery.
A mill source reported an offer at €680 per tonne EXW, but said discounts were still possible for larger tonnages.
Transactions were, however, limited, because buyers remain unconvinced that prices have reached rock bottom yet.
Overseas suppliers, meanwhile, were resisting an further downturn in prices, sources said.
Offers from one Japanese supplier for August shipment HRC were heard at €585 per tonne CFR, while another producer from the nation was aiming for around €595-600 per tonne CFR – the same offer seen in the week to June 2.
In general, however, HRC offers from Asian mills were consolidating at around €580-590 per tonne CFR for August shipment, sources said.
Other sources, however, said that some Vietnamese mills were willing to accept €560 per tonne CFR for tonnages of 20,000 tonnes or more.
Published by: Julia Bolotova