European HRC buyers continue holding back from trading

The European hot-rolled coil market was quiet at the end of the working week, with minimal trading activity reported amid persistent oversupply, sources told Fastmarkets on Friday September 30.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €751.67 ($731.47) per tonne on Friday, down by €5.83 per tonne from €757.50 per tonne the previous day.

The latest calculation of the index was down by €13.33 per tonne week on week but up by €16.67 per tonne month on month.

Buyers’ estimates of achievable prices were reported between €730 per tonne exw and €790 per tonne exw, depending on tonnage.

Trading activity, however, has remained minimal in the region despite mills being prepared to offer discounts for larger tonnages.

“Producers are desperate for orders, but nobody is looking to restock now,” a trading source in the region said.

Mills in the region were still able to offer coil with November delivery, sources said.

Buyers and producers expressed different expectations regarding the price trend.

Some mills were confident that production cuts will start to have an effect toward end of the fourth quarter this year, and some even said they expect an HRC price rebound in response to inevitable restocking.

Buyers, on the other hand, were certain that more output cuts were needed to balance the market and did not expect any recovery in trading activity or an HRC price rebound, even in the first quarter of 2023.

“We are heading toward recession,” a distributor in the region said. “There are no signs of demand recovery, and production cuts have had no impact on the market so far. We expect more mills in Europe to reduce or cut output in the fourth quarter.”

Fastmarkets’ calculation of its daily steel HRC index domestic, exw Italy was €758.75 ($738.36) per tonne on Friday, down by €1.25 per tonne from €760 per tonne on Thursday September 29.

The latest calculation of the Italian index was down by €2.50 per tonne week on week but up by €42.08 per tonne month on month.

Buyers’ estimates of tradeable price levels remained at around €750 per tonne exw for large tonnages and €770-780 per tonne exw for small tonnages.

Italy’s market was also quiet on Friday with little to no trading activity reported.

“We do not need [HRC] tonnages for the fourth quarter. We will look into first-quarter [booking] in November,” a trading source in Italy said.

Import HRC offers to Italy were largely flat week on week, with no fresh booking reported recently.

Offers of HRC with late fourth quarter delivery from Turkey were heard at €710-720 per tonne cfr Italy.

At the same time, several sources said that one supplier from Japan was offering HRC with early first quarter 2023 delivery at €690 per tonne cfr Italy.

And finally, boron-added HRC from India was offered to Italy at €680-690 per tonne cfr.

Published by: Julia Bolotova