European HRC buyers hold back from restocking amid uncertain outlook

European steel hot-rolled coil prices remained static in a slow market on Thursday February 8, with buyers holding mixed views about the future price trend, industry sources told Fastmarkets.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €754.79 ($812.64) per tonne on Thursday, down by €0.59 per tonne from €755.38 per tonne on February 7.

The index was down by €7.21 per tonne week on week but was up by €49.16 per tonne month on month.

Market sources pointed out that trading has been slowing down over the past couple of weeks, with buyers preferring to book only minimal tonnages.

Buyer sources claimed that they had enough HRC in stock and therefore were not chasing additional volumes, especially considering the lack of a clear price direction for the second quarter of 2024.

Buyers’ estimates of tradeable HRC prices in Northern Europe were mainly between €750 per tonne and €760 per tonne ex-works.

Several sources told Fastmarkets that some mills had begun to be “more flexible” and to provide discounts on reasonable volumes to encourage buying.

“We have noticed that, since early February, mills were considering price discounts to stimulate demand,” a steel service center in the region said.

Offers from integrated mills in the region were heard at €740-770 per tonne delivered, “with some room for negotiation,” market sources said. Local mills were currently selling March-production, April-delivery HRC. But the lower end of that price range was only available from one supplier, market sources said.

Expectations regarding future price trends were quite mixed among buyers and sellers.

Buyers were limiting their purchases, expecting prices to decline toward the end of the first quarter amid lackluster end-user demand.

“Mills are not successful in getting higher prices for second-quarter [delivery] orders,” a buyer in Germany said. “Nobody buys anything for stock, just daily business. There are no positive changes from the demand side – that’s the key problem.”

Producers, for their part, expected a stabilization in February, because domestic supply was still reduced, and the pressure from imports has eased recently, with imports of HRC becoming increasingly difficult because of EU import safeguards and the Red Sea shipping crisis.

Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €750.00 per tonne on Thursday, down by €2.75 per tonne compared with €752.75 per tonne on February 7.

The index was also down by €5.50 per tonne week on week, but up by €58.75 per tonne month on month.

Italian buyers estimated tradeable prices at €740-760 per tonne ex-works for domestically produced coil with March-April lead times. This was in contrast with offers reported at €780 per tonne delivered (€765-770 per tonne ex-works).

Trading was dull in the local market because buyers have been keeping to the market sidelines, and not restocking.

Import offers, meanwhile, were broadly stable day on day and, despite quite a significant gap to domestic prices, buyers were largely avoiding overseas bookings.

“There are too many risks with imports,” a buyer source said. “All the cheapest options are for delivery in the third quarter, and we are not sure about the quota allocations and safeguards extensions for that period.”

Offers from Vietnam for April shipment were heard at €635 per tonne cfr to Italy.

A Japanese supplier was also offering April-shipment coil at €650 per tonne CFR to Southern Europe.

And an Indian mill was offering April-shipment HRC to Europe at €670 per tonne CFR.

Published by: Julia Bolotova