European HRC buyers cautious with bookings, but mills remain bullish

European hot-rolled coil prices were largely flat on Tuesday November 21, with little activity seen in the spot market, but producers are maintaining their offer prices and even considering rises for 2024, sources told Fastmarkets.

The pace of restocking was quite slow in the spot market, with buyers seen unwilling to commit to big tonnages.

“Buyers are still unsure what will happen with prices, so they are very careful about buying for stock,” a steel service center source in Northern Europe told Fastmarkets.

Deals for German HRC with six- to eight-week delivery were done at €650-660 ($710-721) per tonne ex-works, sources said, while offers for similar material from an integrated mill in Northern Europe were heard at €660-680 per tonne ex-works.

For first-quarter production, some mills are looking to increase prices further, sources said, with price indications heard at a minimum of €700 per tonne ex-works.

“The current price rises are cost-driven, supported by a revival in apparent steel demand amid lower supplies. But consumption is still weak, so any new rises [would be] questionable,” a buyer source told Fastmarkets.

Producers negotiating long-term contracts with end users for the first half of 2024 were said to be looking for €750 per tonne for HRC and €850 per tonne for hot-dip galvanized (HDG) coil – in line with flat steel contracts for the second half of 2023.

“Mills are unwilling to drop prices in the spot market just two weeks after they announced price rises, especially while they negotiate with the automotive sector,” a trader source in German told Fastmarkets.

“We will see the outcome of negotiations closer to mid-December,” the source added.

Several buyer sources told Fastmarkets that they planned to restock for February delivery in mid-December because they expected to have a “more clear market picture by that time.”

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €656.25 ($717.19) per tonne on Tuesday, up by €1.25 per tonne from €655.00 per tonne on Monday.

The index was up by €3.25 per tonne week on week and by €43.12 per tonne month on month.

In Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €635.00 per tonne on Tuesday, unchanged from Monday.

But the index was up by €5.00 per tonne week on week and by €38.33 per tonne month on month.

For January-February delivery, Italian mills plan to increase offers by another €40-50 per tonne, with price ideas voiced at €660-680 per tonne ex-works, sources said.

In contrast, market participants told Fastmarkets that the tradable value was about €630-640 per tonne ex-works on Tuesday.

Market activity in Italy was quite slow on Tuesday due to still-weak real steel demand, sources said.

“Consumption is still weak, but prices [for HRC] in November still increased due to restocking production cuts at mills. The question is whether the uptrend will stick in Q1 [2024],” a steel service center source in Italy said.

Import offers were also moving up, with January shipment Asia-origin coil on offer to Italy at €620-640 per tonne CFR.

And Indian HRC was on offer in Italy at €640 per tonne CFR.