A combination of slow demand from key end-user sectors and chronic oversupply continued to act as a drag on domestic HRC prices in Europe.
Sources said the recent news about the potential closure of two factories at leading German automaker Volkswagen had flustered the steel sector and said it might aggravate the oversupply situation in European HRC. They added, however, that there had been no immediate effect and that Volkswagen’s decision was not yet firm.
Long-term contracts with original equipment manufacturers in the automotive industry for the second half of 2024 were only recently closed at €740-750 ($821-832) per tonne – and even at €700 per tonne in some cases – in contrast with €800 per tonne in the first half of the year.
“EU mills made some concession for H2 [2024] contracts with the automotive [manufacturers], but the gap with the spot market is still too big. Negotiations for H1 2025 will start in October and there will be a fight for another decline,” a buyer in Germany said.
In the spot market, buyers were in no rush to replenish stocks, given the slow order intake.
“Traders and steel-service centers (SSCs) are postponing bookings because of uncertainty over price developments, due to the disappointing performance of the automotive and construction [sectors], but also because of the short lead times [from the EU mills] or sufficient stocks” a buyer source in northern Europe said.
“At the same time, there is fierce competition especially between SSCs because of high inventories and cashflow needs.” the source added.
On Friday, offers from integrated mills in Germany and the Benelux region were heard at €600 per tonne ex-works, but Fastmarkets understands that some producers are ready to sell at €570-580 per tonne ex-works for larger tonnages.
And one major supplier was heard offering HRC at €580 per tonne ex-works.
Buyer estimates of workable prices were reported at €560-590 per tonne ex-works, depending on the tonnage, but the lower end of the range was deemed as “unworkable” by suppliers.
Nevertheless, two sources reported a booking of HRC from a Benelux-based re-roller at €560 per tonne ex-works in the week to Friday – although the deals could not be confirmed at the time of publication.
Lead times from European mills were about five to six weeks, sources said.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €580.75 ($649.39) per tonne on Friday, down by €6.95 per tonne from €587.60 per tonne on the previous day.
The index was down by €10.50 per tonne week on week and by €39.25 per tonne month on month.
In Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €580.24 per tonne on Friday, down by €4.76 per tonne from €585 per tonne on the previous day.
The Italian index was down by €11.01 per tonne week on week and by €39.76 per tonne month on month.
Offers of HRC in Italy were heard at €600 per tonne CPT from domestic and European suppliers, for material with October lead times.
And a European mill sold a cargo to Italy around €600 per tonne CPT in the week to Friday, sources said.
Market participants estimated the tradable level at €570-590 per tonne ex-works for domestic coil.
Import prices were slightly weaker compared with last week, but overall, interest in overseas coil was not booming due to pending anti-dumping investigations against certain origins and safeguards measures.
This week, HRC from India was on offer to Italy at $600 per tonne CFR, sources said.
And Turkish HRC was offered to Italy at €560 per tonne CFR, including the anti-dumping duty.
Chinese HRC, meanwhile, was on offer at €530-540 per tonne CFR to Antwerp, including the anti-dumping duty, but no bookings have been reported yet.
