European HRC market slows ahead of holidays

The European hot-rolled coil market has slowed ahead of the year-end holiday period, leaving prices close to flat, sources told Fastmarkets on Tuesday December 20.Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €653.50 ($693.46) per tonne on Tuesday, down by €0.50 from €654.00 per tonne on Monday.

The latest calculation of the index is up by €17.79 per tonne week on week and up by €27.67 per tonne month on month.

Offers from mills in the region were reported at €660-680 per tonne EXW for February delivery HRC, while buyer estimates of an achievable price were heard at €630-650 per tonne EXW.

Market participants reported transactions for limited tonnages at €650-660 per tonne EXW in the region.

But several sources said that European producers were not accepting bids below €650 per tonne EXW.

HRC from Italy was on offer in southern Germany at €670-680 per tonne delivered late last week, but Italian mills were said to be out of the market this week.

Trading activity was slow in the region due to the approaching winter holidays and distributors have mostly booked the necessary tonnages for early first-quarter delivery and were largely out of the market, Fastmarkets understands.

Some buyers were questioning the sustainability of the apparent uptrend in the first quarter of 2023.

“We booked tonnages [of HRC] at €600 per tonne EXW about four weeks ago and we do not see any reasons for prices to move up by €50 per tonne,” a German stockholder said. “It is a question of the demand in the first place and we don’t see end-user demand as sufficient to back a price rise.”

Producers, meanwhile, increased their offers late in the week to December 16 and have no intention of cutting prices, mainly because of their high production costs, but also because they hold a different view about the demand situation for the first quarter of next year.

“We see apparent steel demand picking up on restocking in recent weeks [and] in the first quarter, we expect real steel demand to improve as well,” a mill source told Fastmarkets.

In fact, several integrated producers in the region told Fastmarkets the target price level for HRC in January-February 2023 was €700 per tonne EXW.

Fastmarkets’ calculation of its daily steel HRC index domestic, exw Italy was €645.00 per tonne on Tuesday, up by €1.67 per tonne from €643.33 per tonne on Monday.

The latest calculation of the Italian index is up by €18.33 per tonne from a week earlier and up by €45.00 per tonne month on month.

The Italian HRC market was also quiet on Tuesday, with local mills preparing for holiday stoppages.

Italian producers were offering €650-680 per tonne EXW for February-delivery HRC.

Buyers estimated that the workable level was about €640-650 per tonne EXW, with some deals reportedly concluded within that range.

Overseas HRC offers to Europe were scarce and largely considered unworkable for EU buyers because of the long lead times and, in any case, most buyers have been out of the market this week.

“We booked everything we wanted to from imports about five or six weeks ago,” a buyer in Southern Europe said.

Offers for coil imported from Japan were heard at €630-640 per tonne CFR Italy, while Turkey-origin coil was on offer to Italy at €650-655 per tonne CFR, duty included.

Sources also reported an offer from Indian mills at €610-620 per tonne CFR Italy.

Published by: Julia Bolotova