European HRC market sentiment bearish on weak demand, oversupply

European hot-rolled coil prices remained under pressure on April 9 due to combination of poor demand and excess supply.

The mills have been trying to hold prices stable in local markets but were giving discounts when making offers to other European countries, sources said.

“We see different prices from the mills depending on the destination and a buyer, there is no unified approach,” a Benelux-based service center said.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe stable on day at Eur640/mt ex-works Ruhr on April 9.

Tradable values were reported at Eur630-640/mt ex-works Ruhr with majority of data reported at Eur640/mt ex-works Ruhr.

German mills offered material to local buyers at Eur650-670/mt ex-works Ruhr, offering material with a discount to other European countries. Market participants said the discounted prices – around Eur610-620/mt ex-works Ruhr – were not available to the German market and were excluded from the assessment.

Steelmakers across Europe have been offering May delivery coil.

Platts, part of S&P Global Commodity Insights, assessed domestic prices for hot-rolled coil in South Europe stable on day at Eur620/mt ex-works Italy on April 9.

Offers have been heard at Eur640-650/mt delivered Italy, bids – at Eur620/mt delivered Italy and tradable values – at Eur620/mt ex-works Italy. Some sources, however, said that the prices of Eur620/mt ex-works would not be accepted for sales within Italy.

Demand, in the meantime, remained muted from end consumers and distributors have been avoiding bookings in the bearish market. Majority of market sources believe that steelmakers need to stop some furnaces to tackle excess supply and, therefore, to prevent price drops.

“The only way to deal with lack of demand and oversupply is stoppages of the furnaces, but the steelmakers take their time,” a German service center said.

Some market sources, however, reported that the distributors might need to restock soon as they have been avoiding booking of substantial volumes since the start of the year.

“Demand still low, with possible small improvement during second half of April due to restocking, with May feeling more positive,” an Italian service center said.

“There are some lights are there by the end of the tunnel, bigger distributors started to talk about restocking, searching for bottom and intensifying the interest,” a distributor said.

Maria Tanatar