European HRC market remains bullish despite limited real demand

Sentiment in the European hot-rolled coil market remained upbeat on Nov. 10 even though real demand is not recovering and amid concerns related with an increase in domestic production.

Lead times from European mills have increased by a couple of weeks, sources said. However, they claim that this only indicates that automotive companies postponed some deliveries for the first quarter next year and distributors have restocked minimal volumes, while real demand has remained low.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe stable on day at Eur650/mt ex-works Ruhr on Nov. 10.

Deals were heard in the range of Eur650-655/mt ex-works Ruhr, with the majority of transactions reported at Eur650/mt ex-works Ruhr.

Offers and near-term tradable values were heard at Eur680-700/mt ex-works Ruhr.

European steelmakers are expected to keep spot trade limited accepting only higher prices in order to have better position in long-term contracts negotiations. Majority of steelmakers have been aiming for stable prices in contracts for full 2024.

“Mills would rather trade less on spot, but have prices higher to have an argument in contract discussions,” a mill source said.

At least three blast furnaces in Northwest Europe and one in Central Europe are expected to restart production in the coming few months. And market participants have been concerned that the increased availability combined with unchanged real demand would result in price drop.

Platts assessed domestic prices for hot-rolled coil in South Europe down by Eur10/mt on day to Eur640/mt ex-works Italy on Nov. 10.

The assessment was based on tradable values heard at Eur640/mt ex-works Italy and deals reported at Eur650/mt delivered Italy.

Platts is part of S&P Global Commodity Insights.

Author: Maria Tanatar