European hot-rolled coil prices edged lower on Tuesday May 5, weighed down by sluggish demand and comfortable inventory levels on the buy side – and with summer approaching, few in the industry see any realistic path to a substantial price recovery in the short term, sources told Fastmarkets.
In Northern Europe, buyer sources estimated achievable prices at €680-700 ($796-820) per tonne for June-July delivery, with the lower end of the range said be have been offered by a re-roller in the Benelux area.
German mills had no June delivery coil availability, according to sources, but attempts to consolidate offers at €730-750 per tonne delivered (€715-735 per tonne ex-works) for July delivery volumes have failed to gain traction so far.
“There is no chance [of a] price increase going into summer, when demand usually slows down,” a steel service center source in Germany said. “Besides, we are well stocked and don’t need [more] material – especially looking at the demand from end users.”
One integrated mill in the Benelux region was said to still have technical issues and, therefore, had no June-delivery coil available, sources said. And because of the tech issues, the supplier was down by 70,000-80,000 tonnes of HRC in the short term and therefore could not be very flexible on pricing. Offers for July were heard at €740-750 per tonne ex-works, but no confirmed deals were reported at that level.
Fastmarkets’ European HRC indices were not published on Monday May 4 because of the Spring Bank Holiday in the UK.
But Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €698.75 per tonne on Tuesday, down by €3.75 per tonne from the latest calculation of €702.50 per tonne on May 1.
The index was down by €6.88 per tonne week on week and by €20.01 per tonne month on month.
In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €693.75 per tonne ex-works on Tuesday, down by €1.25 per tonne from the most recent calculation of €695.00 per tonne on Friday May 1.
The index was down by €6.25 per tonne week on week and by €5.00 per tonne month on month.
Trading remained thin in the Italian HRC market, where tradable values were still hovering below the official offers, according to sources.
“The [HRC] market is totally flat. No new inquiries, no new negotiations… European mills couldn’t further raise prices [for July lead times] despite being protected by several trade barriers,” a trading source in Italy said.
Italian mills were offering June-July delivery coil at around €720 per tonne delivered (€705 per tonne ex-works), but most sources said the realistic transaction level in Italy was no higher than €680-700 per tonne ex-works.
A local re-roller, which suspended HRC production at the beginning of April due to technical issues, was expected to resume operations in June, sources told Fastmarkets.
No new import offers have been heard in Italy since last week.
Fastmarkets weekly price assessment for steel hot-rolled coil import, cfr main port Southern Europe, was €590-652 per tonne on April 29, with the lower end of the range reflecting transactions for Turkish coil and the upper end for Algerian HRC.
The pool of HRC suppliers willing to import into Europe remained limited on Tuesday. Offers from Asia have been scarce lately, with the potential costs arising from the EU Carbon Border Adjustment Mechanism (CBAM) weighing on demand, while disruption related to the conflict in the Middle East and higher freight rates added to the downward pressure on prices.
