European HRC market remains silent as buyers, producers abstain from trading

The standstill in the European hot-rolled coil market continued on Tuesday April 18, with buyers and producers holding back from conducting any business, sources told Fastmarkets.
Most major integrated HRC producers in Northern Europe were still out of the market, and not releasing new offers. Producers had healthy orderbooks and were therefore not chasing orders, sources said.

“German mills are not giving new offers for July-delivery coil, [while] ArcelorMittal and Tata Steel are also out of the market,” a trading source in the region said.

“[ArcelorMittal] is still out of the market. They have already announced long delays on HRC deliveries, with possible effects [carrying on] into July/August,” a second trading source in Europe said.

Despite reduced availability of HRC in the European market due to blast furnaces stoppages at ArcelorMittal and Tata Steel Ijmuiden, sources believe that prices were unlikely to rise in the near term.

Stockholders and steel-service centres, for their part, also had sufficient stocks of HRC and were holding back from trading.

Several trading sources said they were not looking for volumes and were currently monitoring the impact of delivery delays from ArcelorMittal and the potential price trend.

“Buyers have been making back-to-back bookings lately, but even back-to-back business is rare these days; the market is totally calm,” a third trader in the region said.

In addition, buyers were concerned about low levels of consumption and the difficulties with passing even current prices on to end users.

Buyers also believed that the recent pick-up in demand from automotive industry was only going to short-lived, since end users were only looking to replace HRC volumes lost due to unplanned equipment stoppages at some mills.

Buyers’ estimations of tradeable levels were still at €830-850 ($909-931) per tonne EXW on Tuesday.

One source said German producers were considering a price for third-quarter delivery HRC of €860-870 per tonne EXW, but said this level was not workable in the current market.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €846.63 per tonne on Tuesday, down by €3.79 per tonne from €850.42 per tonne on Monday.

The index was down by €8.37 per tonne week on week, but up by €0.38 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy at €845.00 per tonne on Tuesday, down by €3.33 per tonne from €848.33 per tonne on Monday.

The index was down by €8.13 per tonne week on week, but up by €27.75 per tonne month on month.

Apparent steel demand was also quite dull in Italy due to a lack of confidence among buyers caused by extended lead times at local mills, subdued consumption by end users and declining import offers, sources told Fastmarkets.

Offers from the local suppliers in Italy were in a range of €870-880 per tonne delivered, which would be an equivalent to €850-860 per tonne EXW.

At the same time, buyers’ estimations of tradeable values were heard at €840-850 per tonne EXW.

HRC offers from overseas suppliers have been declining since last week, with some suppliers quoting material below €700 per tonne CFR to Italy.

Thus, the gap between domestic and import price has been growing, along with lead times from domestic mills, which are now almost in line with imports, thereby making overseas bookings more attractive, sources told Fastmarkets.

Sources reported HRC offers from Vietnamese suppliers at around $687-692 per tonne CFR.

Indian HRC was available for Italian buyers at €690-700 per tonne CFR.

No new offers were heard from Japan on Tuesday, but sources expected Japanese suppliers to adjust their offers in line with other Asian suppliers.

Published by: Julia Bolotova