European HRC buyers expect prices to correct; mills optimistic on good order books

Trading in the European hot-rolled coil market was limited on Wednesday February 1 due to buyers being cautious about accepting higher prices, sources told Fastmarkets.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €751.88 ($815.63) per tonne on Wednesday, edging lower by €3.75 per tonne from €755.63 per tonne on Tuesday.

The latest calculation of the index was down by €2.32 per tonne week on week, but up by €83.13 per tonne month on month.

Offers from producers in the region for April-delivery coil were reported at €770-800 per tonne EXW, sources told Fastmarkets. But tradeable values were lower, between €740 and €760 per tonne EXW, according to buyer sources.

Distributors and steel service centers said that end users were reluctant to accept higher HRC prices and only limited volumes had been traded recently.

“We actually expect a downward correction in one or two weeks, since demand from both the automotive and construction industries remains slow,” a buyer source in Germany told Fastmarkets.

But producers remained firm citing strong order books and limited availability of coil due to production cuts.

Fastmarkets’ assessed the daily steel hot-rolled coil index domestic, exw Italy was €750.00 per tonne on Wednesday, down by €1.67 per tonne from €751.67 per tonne on Tuesday.

The latest calculation of the index was up by €7.22 per tonne week on week, and by €97.50 per tonne month on month.

For bigger volumes, it is still possible to book coil at €730-740 per tonne EXW in Italy, sources told Fastmarkets.

But buyers preferred to make hand-to-mouth bookings while assessing market conditions.

Offers from local producers were heard at €760-780 per tonne EXW for second-quarter delivery.

One Italian integrated mill was overbooked and might delay deliveries of material bought in December, according to local sources.

Meanwhile, another integrated steelmaker in Italy was opting to produce more value-added flat products, such as hot-dipped galvanized coil, so HRC volumes for the spot market were limited.

Sources suggested the limited availability of HRC would support an uptrend in the second quarter.

Meanwhile, other sources questioned further rises in the local HRC market while demand from end users was still stable at low levels with no sign of a rebound.

Import HRC offers from Taiwan were heard at €720 per tonne CFR, but for limited volumes.

Several sources, however, said this offer was no longer available in the week starting on January 30.

April-shipment HRC from India was offered to Italy at €735 per tonne CFR.

Turkey-origin HRC with April delivery was offered to Italy at €735-750 per tonne CFR, sources said.

Published by: Julia Bolotova