European hot-rolled coil prices were broadly unchanged on Wednesday February 4, with buyers being resisting higher offers, which have been caused by the Carbon Border Adjustment Mechanism’s (CBAM) impact on imports rather than strong local demand, Fastmarkets heard.
In Northern Europe, HRC prices were holding firm, with no clear signs of a trend reversal. But new offers for April delivery met resistance, as buyers were reluctant to accept higher prices, leading to slower growth despite generally upbeat sentiment, driven by CBAM.
In Germany and the Benelux area, offers for second-quarter-delivery coil were reported at €670-675 ($792-798) per tonne from integrated mills.
Meanwhile, recent transactions were not exceeding €650 per tonne ex-works. Notably, a medium-sized deal was heard done in Germany at this level. A buyer, however, pointed out that it was done “for leftovers of March-delivery coil, while of April delivery the sellers were looking to achieve higher prices.”
Other stakeholders suggested that it might take suppliers “weeks, if not a month or two,” to seal higher offers in deals, mainly because of end-users’ resistance to accept increases.
“Real demand is not improving, and this is the main issue. The recent uptrend is artificially pushed by CBAM uncertainty and consequently limited imports,” a second buyer said.
A third buyer also agreed that the “price increase comes mainly from CBAM and the uncertainty related to it, which makes customers consider buying in the EU rather than going for imports.”
As a result, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €651 per tonne on Wednesday, down by €0.07 per tonne from €651.07 per tonne on Tuesday February 3.
The index was also down by €4 per tonne week on week but up by €23.50 per tonne month on month.
After the index was published, a source reported that one German mill had sold “leftover tonnages” of March-delivery coil at €620 per tonne ex-works. A fourth buyer source claimed that the transaction was done at €620 per tonne CPT (around €605-610 per tonne ex-works), but this was not widely confirmed by other sources.
The majority of sources that spoke to Fastmarkets on February 4 estimated achievable prices for HRC in the region at €650 per tonne ex-works.
Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €647.50 per tonne on Wednesday, up by €0.50 per tonne from €647 per tonne a day earlier.
But the index was up by €5 per tonne week on week and by €24.38 per tonne month on month.
Offers were heard at €650-660 per tonne EXW, with several sources saying that March delivery now “is almost gone,” with last batches of material being traded at €640 per tonne EXW.
