European HRC market seasonally slow; prices under pressure from weak demand

Downbeat expectations prevailed in the European hot-rolled coil market on Thursday July 20, with aggressive sales reported from some mills, while others preferred to hold back from doing business entirely, sources told Fastmarkets.

In Northern Europe, firm offers were scarce because some major integrated producers either had technical issues or claimed to have healthy order books and were sold out for October deliveries already.

In general, mills in the region were able to offer September- and October-delivery HRC.

A trading source told Fastmarkets that an integrated mill in the Benelux region was not offering HRC this week.

“The reason is that they have a big delay with a blast furnace repair. So they do not need orders,” the source said.

An integrated producer in the region estimated tradable values at €700 ($785) per tonne ex-works, but buyers deemed such a level to be completely unworkable.

Buyers estimated tradeable values for HRC produced in the region to be no higher than €650-670 per tonne ex-works, depending on tonnage.

A buyer source reported an offer from a re-roller in Benelux to Germany at €640 per tonne delivered, while another source reported a transaction from the same mill at €620 per tonne delivered.

Sources also reported transactions for HRC from Central to Northern Europe at €640-650 per tonne delivered, but mostly for small lots.

Demand for coil was slowing further due to seasonal factors and a gloomy post-summer outlook, according to sources.
Even though inventories among buyers have been decreasing, they were gradually holding back from restocking, citing weak prices and slow demand downstream.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €659.17 per tonne on July 20, down by €7.08 per tonne from €666.25 per tonne on July 19.

The latest calculation of the Northern European index was down by €20.58 per tonne week on week and by €20.58 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €638.75 per tonne on July 20, down by €3.13 per tonne from €641.88 per tonne on July 19.

The Italian index was down by €16.25 per tonne week on week and by €13.25 per tonne month on month.

In Italy, the market was also seen slowing down ahead of summer stoppages.

Buyers reported tradeable values for September-delivery HRC at €640-650 per tonne delivered on Wednesday, which would net back to €625-635 per tonne ex-works, sources said.

Official offers were heard at higher levels, reaching up to €700 per tonne ex-works, but these were never sealed in transactions, according to sources.

Bids were heard at even lower levels, though — at around €610-615 per tonne ex-works.

“The Italian market is very calm and there is almost no trading unless you are very cheap. People want to book domestic HRC at import prices,” a second trading source said.

Import offers were more attractive mainly due to the strengthening of the euro against the US dollar. But European buyers were not very active with import bookings due to safeguards concerns, and an uncertain pricing outlook for the fourth quarter.

September-shipment HRC from Japan was on offer at $680 per tonne CFR to Antwerp, but sources said that sellers were ready to consider bids at $650 per tonne CFR.

HRC offer from Asian mills were reported at €600-610 per tonne CFR to Italy for September-October shipment, while one mill from Vietnam was offering HRC to Southern Europe at slightly lower levels — $645 per tonne CFR.

Published by: Julia Bolotova