Demand fundamentals were uncertain in the European hot-rolled coil market Feb. 17, with buyers unwilling to commit volumes to rising prices unless necessary.
A distributor clarified that perceptions of strong demand were likely due to necessary restocking from those stockholders that resisted purchasing toward the end of last year, now in need of material.
“I think any demand is mainly coming from distributors, not end-consumers,” said a service-center source. “Buyers who avoided bookings in Q4 now need to restock, but the outlook remains uncertain due to unwillingness to meet current offer levels.”
A mill source agreed the sentiment, saying “there is no activity in the market. Demand from end-users is uncertain, January and February performed well but now the situation is unclear.”
The construction industry was said to be “slow,” though mixed expectations were heard for automotive. One distributor said larger automotive buyers had failed to take reserved volumes, and was pessimistic on automotive demand, while another distributor characterized the sector as “doing better.”
More generally, buyers were heard as needing to substitute Turkish material ordered for February-March delivery, now unavailable due to the recent earthquakes.
“The earthquakes in Turkey have put some buyers in a very stressful situation,” said the service-center source. “Those who expected volumes will need to replace them in Europe, paying higher prices.”
Offers in the market for May delivery were reported at Eur820/mt ex-works Ruhr, with tradable value recorded on a range of Eur780-810/mt ex-works Ruhr and Northern Europe across distributor and mill sources.
A deal was reported from a service-center source at Eur800/mt ex-works Northern Europe, including Eur25/mt carbon surcharge, for tonnage in quadruple digits.
Platts assessed hot-rolled coil in Northwest Europe stable on the day at Eur785/mt ex-works Ruhr.
Platts is part of S&P Global Commodity Insights.
— Benjamin Steven, Maria Tanatar
