European HRC prices dip on reduced spot activity, auto woes

European steel coil prices remained under pressure Friday from imports and minimal buying activity in the spot market, even with announcements of gradual restarts to the automotive sector this week.

One German buyer said any recovery in the market was dependent on how rapidly the automotive industry restarted production.

“Production will come back in shifts, Audi will look to restart in week 18 and BMW and Mercedes in week 19, but it also depends on when their suppliers return,” the source said.

He was optimistic however, that demand would pick up in July-August in anticipation of customers returning to the market.

Another German service center source said most sub-suppliers remain closed, which would have a significant effect on production resuming.

“I guess [automotive producers] will be seeking agreements [on re-opening] with their suppliers,” he said.

The source added that European steel market would not benefit much from the North American and Mexican automotive restarts, saying “they’ll be insisting on minimum 70% local material.”

A Benelux-based trading source said that even with the imminent resumption of the automotive industry, the extent to which car sales would increase remained the larger issue.

“The automotive companies are trying to find agreements with their workforces on how to proceed, but the real problem will car sales — customers don’t have the confidence to decide what type of car to buy right now,” he said.

Aggressive Russian imports were heard to be putting pressure on prices, particularly for hot-rolled coil, with one German service source hearing a tradable value at Eur410/mt delivered into Belgium SCC ex-Russia.

Several market participants said they were still turning down imports due to the unattractive lead times of August-September.

“I don’t know what will happen in a few months, so if I’m going to buy, I need to be careful with what quantities I order,” a German buyer said.

A Benelux trader source buying activity was minimal, with there being “no real transactions” at the moment.

“We are making some proposals to customers but no one is buying – the mills are still keeping their prices elevated,” he said. “The reality is we will lose two months of consumption [after these lockdowns].”

The Platts TSI hot-rolled coil index was calculated Friday at Eur451/mt ($490.64/mt) ex-works Ruhr, declining Eur1/mt day on day.

Cold-rolled coil was assessed at Eur537.50/mt ex-works Ruhr, an increase of Eur5/mt day on day.

In Southern Europe, HRC was assessed at Eur430/mt ex-works South Europe, unchanged, and CRC was assessed at Eur497.50/mt, down Eur19.50/mt week on week.

— Amanda Flint