Many mills across Europe have cut output or weighed up the benefits of cutting output in an attempt to lower production costs amid ongoing weakness in the flat steel market, sources said.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €631.88 ($672.54) per tonne on Monday, up by €2.09 per tonne from €629.79 per tonne on Friday September 22.
The index was down by €5.62 per tonne week on week and by €11.87 per tonne month on month.
Subdued demand from key end-use sectors, combined with an imbalance in supply-demand dynamics, resulted in minimal market activity in European HRC prices.
Market participants told Fastmarkets they expect restocking activity to restart at the beginning of October.
Producers, meanwhile, are likely to begin cutting output to rebalance the market, sources said.
“Output cuts are one of the few things that can help to rebalance the market. But if mills [instigate] stoppages now, the effect will only be seen in the first quarter of 2024,” a European trader source said.
Buyer estimates for HRC were reported at around €615-630 per tonne ex-works in Northern Europe.
In the week to September 22, producer estimates for HRC in the region came in at €630-650 per tonne ex-works.
Meanwhile, the calculation of the corresponding daily steel hot-rolled coil index, domestic, exw Italy was €621.67 per tonne on Monday, up by just €3.13 per tonne from €618.54 per tonne on Friday.
The Italian index was down by €4.58 per tonne week on week and by €13.55 per tonne month on month.
The Italian HRC market remains quiet amid slow demand and mixed sentiment, sources told Fastmarkets.
“Prices are relatively stable since last week, [but] buying activity is currently weak,” a trader source said.
And a buyer told Fastmarkets: “We are facing very slow demand and an ongoing wait-and-see attitude among [end users].”
Buyer ideas of the tradable price for HRC in Italy were generally no higher than €620-630 per tonne ex-works.
Mills were reported to be offering HRC for November-delivery, sources said.
Interest in imported HRC remains subdued, mainly due to the long lead times, the small gap with domestic prices and safeguard-related risks.
Import offers for HRC from Asian exporters were reported at €600-610 CIF.
Published by: India-Inés Levy