European HRC deal prices drop as mills struggle to fill order books

Hot-rolled coil (HRC) prices in Northern Europe sank again, with producers struggling to fill order books, sources told Fastmarkets on Tuesday August 23.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €722.40 ($721.45) per tonne on Tuesday, down by €20.10 per tonne from €742.50 per tonne on Monday.

The latest calculation of the index was down by €37.60 per tonne week on week and by €132.60 per tonne month on month.

A sale of September rolling HRC from an integrated mill in Germany was reported at €700-720 per tonne exw.

Producers in the region were offering September-October rolling HRC to the market, sources said.

Market sources estimated the achievable prices for tonnages up to 1,000 tonnes to be between €730 and €750 per tonne exw on Tuesday.

But for bigger volumes, producers in Northern Europe were prepared to provide additional discounts. Notably, market participants estimated the tradeable price level for HRC lots over 1,000 tonnes to be about €700-720 per tonne exw, Fastmarkets heard.

Despite HRC prices in the region having fallen by more than €100 per tonne over the past month, this has not resulted in increased buying activity, sources said.

“Traded [HRC] volumes are still very low,” a mill source in Germany told Fastmarkets. “Inventories are still high, and most distributors are largely focused on selling HRC from stock rather than buying new tonnages.”

Buying activity in the spot market is not expected to recover in the first half of September, considering the persistent overstocking and weak consumption, market sources said.

Indeed, some market participants suggested that European mills will need to further cut production to balance the market and stop the downtrend.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was €717.50 per tonne on Tuesday, down by €12.50 per tonne from €730 per tonne on Monday.

The latest calculation of the Italian index was down by €37.50 per tonne week on week and by €57.50 per tonne month on month.

The standstill in Italy’s market continued this week, with both mills and buyers staying largely out of the market.

The latest index calculation was based on buyers’ estimates of achievable prices reported at €700-740 per tonne exw.

Published by: Julia Bolotova