European HRC market digests recent rises; activity slow

European hot-rolled coil buyers were mostly unconvinced about the price increases proposed by steel mills in the region, citing insufficient demand in an oversupplied market, source told Fastmarkets on Thursday October 19.

Earlier this week, several European steelmakers announced small price rises for HRC averaging €10-20 ($11-21) per tonne, to around €635-650 ex-works, claiming this level was the bare minimum they could accept due to rising costs.

Sources also said that some re-rollers were offering HRC at €610 per tonne ex-works.

Buyers in general were unwilling to accept even such a small increase.

“There is plenty of [HRC] available in the market, stocks are full at ports and European mills have four-week lead times on average. In fact, we are counting on price reductions,” a distributor in the Benelux area told Fastmarkets.

“We will not buy [at the] new price levels because we think prices might go down a bit more. Some mills are offering lead times of two to four weeks, so why hurry?” a steel service center source said.

European mills have started to cut output to balance the market and support the price hikes, but buyer sources expect the effect of this will be delayed.

“Very few furnaces have been actually been taken offline, so — once again —mills have started doing things too late. I expect some real effect on the market only in the first quarter 2023,” a distributor in Germany said.

Buyer estimates of achievable prices for HRC in Northern Europe came in at around €600-620 per tonne ex-woks on Thursday.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €615.96 per tonne on Thursday, down by €0.92 per tonne from €616.88 per tonne on October 18.

The index was down by €2.79 per tonne week on week, and down by €19.04 per tonne month on month.

In Southern Europe, meanwhile, the corresponding daily steel hot-rolled coil index domestic, exw Italy was €596.67 per tonne on Thursday, up by €5.79 per tonne from €590.88 per tonne on October 18.

The Italian index was up by €0.04 per tonne week on week and by €26.66 per tonne month on month.

Offers from local mills were reported at €600-620 per tonne ex-works on Thursday, while buyers said the tradable level was no higher than €580-600 per tonne ex-works.

Most buyers said they doubted that the new offer prices could be sealed in deals, given the ongoing slow demand and short order books at steel mills.

“The consensus price for HRC in Italy would be around €600 per tonne ex-works,” a local trader said.

Asia-origin HRC imports for end-December shipment were on offer to Italy at around €580-600 per tonne CFR, mainly from Vietnam, South Korea and Japan.

Published by: Julia Bolotova