The overall outlook for the European HRC market remained negative. Weak demand and oversupply were still the main concerns, Fastmarkets understands.
Despite rumors that production cuts may be needed to balance the market, producers seemed uninterested to take such a step. Fastmarkets heard that mills did not want to lose their free carbon credits, which were allocated based on actual steel output.
“I would like to say that the situation will improve soon, but the outlook remains negative,” a producer source told Fastmarkets.
In Northern Europe, mills were heard offering HRC with lead times of four to six weeks at €580-600 ($640-662) per tonne ex-works.
But according to Fastmarkets’ sources, suppliers would easily agree to sell at €560-570 per tonne ex-works. This was the price range considered to be workable by buyers.
Fastmarkets’ sources reported some deals heard at €560 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €571.06 ($629.75) per tonne on Thursday, down by €6.44 per tonne from €577.50 per tonne the previous day.
The index was down by €16.54 per tonne week on week and by €48.94 per tonne month on month.
“The mills in Northern Europe are hungry for orders. But the buyers see that the market is falling and are not booking much,” a buyer source said.
Meanwhile, in Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy, at €570.63 per tonne on Thursday, down by €0.62 per tonne from €571.25 per tonne on the previous day.
The Italian index was down by €14.37 per tonne week on week and by €46.87 per tonne month on month.
In Italy, offers of HRC were heard at €580-590 per tonne delivered, which would net back to €570-580 per tonne ex-works.
Market participants estimated the tradeable market price at €560-570 per tonne ex-works.
“Trading activity is very low, reaching its lowest level in months. It is close to the bare minimum,” a second buyer source told Fastmarkets.
According to Fastmarkets’ sources, booking imported material was not attractive because of the long lead times and the small price gap to domestic HRC prices in Europe.
Offers of Asian material to Italy were heard at €550 per tonne CFR. Turkish HRC was also offered to Italy at €550 per tonne CFR, including anti-dumping duty.
Green steel
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €100-200 per tonne on Thursday, stable week on week.
The green steel market was also very quiet in Europe, tracking the general downturn in the steel sector.
During the week to Thursday, sources reported offers of green steel – with Scope 1, 2, and upstream Scope 3 carbon emissions of less than 0.8 tonnes per tonne of steel – at €200-350 per tonne from European suppliers.
Industry sources estimated achievable prices for such material at €100-150 per tonne.
“Premiums of €250-350 per tonne are for steel sold under long-term contracts. In the spot market, it is possible to get lower prices,” a buyer source said.
Notably, recent trades for steel with Scope 1, 2 and upstream Scope 3 emissions of less than 0.8 tonnes of CO2 per tonne of steel were reported at €100-150 per tonne in September, with one transaction undercutting the mark of €100 per tonne.
Published by: Julia Bolotova, Darina Kahramanova
