Producers in Northern Europe kept offering steel HRC in the range of €720-750 ($788-821) per tonne ex-works. But demand was still slow, and no major deals were heard in the market.
“Most buyers just came back to work after a two-week break, we will need a few days to figure out the market situation,” a distributor in the EU said.
Two buyer sources estimated the tradable market level to be between €700 per tonne and €720 per tonne ex-works. A third buyer source expressed the opinion that even a bit lower could be achieved, in the range of €690-700 per tonne ex-works.
But several sources told Fastmarkets that European mills were unlikely to sell coil below €700 per tonne ex-works since supply was still limited due to output cuts.
“The mills will not go down below €700 per tonne in spot sales due to good order books”, a buyer source told Fastmarkets.
Most mills could only offer material for March delivery already, while one integrated steelmaker told Fastmarkets they were already offering early-April delivery.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €705.63 per tonne on Monday January 8, increasing by €10.63 per tonne from €695 per tonne January 5.
The index was up by €10.13 per tonne week on week and up by €20.21 per tonne month on month.
No new import offers or bookings were heard in the market.
Last week, sources told Fastmarkets that a lack of competitive imports could support a domestic price rebound for HRC in Europe during January. The mills were offering higher prices for March-delivery HRC because they expected buyers to be short of options with flat steel output in Europe being reduced domestically due to the depleted safeguard quotas.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €691.25 per tonne on January 8, increasing by €1.67 per tonne from January 5.
The index was up by €2.92 per tonne week on week and up by €25.83 per tonne month on month.
Mills in Italy continued offering steel HRC in the range of €720-740 per tonne delivered for February-March delivery. Some sources, however, said, that February delivery was gradually sold out at integrated mills in the nation. But, similarly to the market situation in Northern Europe, demand for coil remained slow, and no major deals were heard in the market.
Two buyer sources estimated the tradeable values for steel HRC in the range of €680-690 per tonne ex-works. But another two buyer sources found these levels too low and estimated the workable market level at about €700 per tonne ex-works.
“It is unsustainable for the Italian mills to sell HRC below €700 per tonne ex-works due to the high production costs,” a second buyer source told Fastmarkets.
The second buyer source added that the limited availability from imports would also influence prices. The source said that buying the material from abroad would mean waiting for its clearance from customs by July.
The source said that prices in Italy would likely reach €740-750 per tonne delivered in the next few weeks and added that those were generally in line with the levels offered now in Northern Europe.