European HRC market remains bullish on mills’ healthy order books

Good order books at steel mills have kept European hot-rolled coil prices elevated despite the limited trading seen in recent weeks, sources told Fastmarkets on Wednesday February 22.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe, at €776.00 ($827.26) per tonne on Wednesday, up by €3.74 per tonne from €772.26 per tonne on Tuesday.

The latest calculation of the index was up by €9.12 per tonne week on week and by €36.22 per tonne month on month.

Mills in the region were offering April-May delivery HRC at €800-820 per tonne EXW, however some mills claimed to have sold out of April volumes already.

“Maybe there will be more April volumes after the Fos-sur-Mer restart,” a mill source told Fastmarkets, referring to the news that leading European steelmaker ArcelorMittal is planning to restart a blast furnace at its Fos-sur-Mer plant in southern France.

Transactions for limited tonnages were reported at €770-780 per tonne EXW on Wednesday, while buyers’ estimations of achievable prices were at €760-770 per tonne EXW.

Most sources agreed that HRC prices would keep rising slowly in March, supported by good order books at mills and expected restocking activity.

But still-subdued demand from end users, as well as increasing availability of coil due to capacity restarts, caused concerned among buyers about the sustainability of an uptrend beyond March and April.

Since January, European producers have gradually been restarting steelmaking capacity that had been idled in the final quarter of 2022 due to poor market fundamentals.

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy, was €769.38 per tonne on Wednesday, up by €6.05 per tonne from €763.33 per tonne on Tuesday.

The latest calculation of the index was up by €11.88 per tonne week on week and by €41.05 per tonne month on month.

Sources said that Italian mills are largely sold out of material for April delivery.

“We saw good order intake from tube makers for April [delivery] coil in the past couple of weeks,” a second mill source said.

Offers of May-delivery coil from integrated mills in Italy were reported at €800-820 per tonne delivered which would net back to €780-800 per tonne ex-works.

Sources said, however, that some transactions for tonnages below 500 tonnes were reported at €770 per tonne EXW in the nation.

Meanwhile, HRC offers from Southeast Asia to Italy were heard at €740-760 per tonne CFR for April May shipment.

But long lead times as well as a small gap with domestic prices stopped European buyers from making overseas bookings.

Published by: Julia Bolotova