Industry sources said that optimism — sparked my higher HRC offers from European suppliers in end-July and early August — have faded due to continued slow demand.
“After [the] price rise announcement by ArcelorMittal and other mills in end-July, market moods improved, and buyers opted to order material [HRC] for autumn; but new offers [above €600 per tonne ex-works] that were voiced in August are hardly achievable in such market environment,” a buyer in Germany said.
In Northern Europe, offers with October lead times were still reported at €590-630 ($687-710) per tonne ex-works, with the higher end offered by a Nordic mill.
Italian mills were offering October-delivery HRC at €610-620 per tonne delivered to Germany, with no sales reported at such levels, however.
Buyers’ estimates of achievable prices were heard at €570-580 per tonne ex-works.
Buyer sources doubted the viability of the uptrend continuing into autumn considering the lack of real demand.
“European mills [have been] searching for orders for October-delivery coil. We ordered a bit more coil in end-July, following the price rise announcement, expecting further rises. We are in no rush for new bookings,” a second buyer in Germany said.
Sources did not expect any improvement in real demand in the next quarter. Moreover, buyers expressed skepticism over a potential lack of imports fueling a recovery in domestic prices.
“The CBAM [Carbon Border Adjustment Mechanism] is of course limiting buying appetite of new imports, and so [are] new trade measures to replace safeguards. But there will be no shortage [of HRC] in Europe in the fourth quarter. A lot of [imported] coil is on the way to Europe, and European mills have a lot to sell, despite low-capacity utilization rates — there is no shortage of HRC,” a distributor in Benelux area said.
Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Northern Europe was €572.50 ($666.40) per tonne on Wednesday, down by €0.42 per tonne from €572.92 per tonne the previous day.
The Northern European index was down by €1.25 per tonne week on week and up by €13.5 month on month.
The Italian market was still quiet, with buyers and sellers expected to gradually come back from the holidays in September.
Estimations of achievable prices were reported at €530-550 per tonne ex-works, while target offers from integrated mills and re-rollers in Italy for October-delivery coil were heard at €570-580 per tonne ex-works.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy was €540 per tonne, flat from Tuesday August 26.
The Italian index was up by €1.67 per tonne week on week, and by €13.75 per tonne month on month.
Prices for overseas coil were also stable in the week to Wednesday.
Fastmarkets’ weekly price assessment for steel hot-rolled coil, import, cfr main port Southern Europe was €470-520 per tonne on Wednesday, unchanged over the past seven days.
The lower end of the range reflected offers from Indonesian suppliers and highest bids from Italian buyers. The upper end of the range reflected the lower end of offers from Turkey, India and Algeria. Sources also reported a booking of Algerian coil at €520 per tonne CFR to Italy.
Julia Bolotova, Davide Montagner
