Trading remained limited across the European HRC market on Tuesday.
Steel service centers and distributors were not hungry for new volumes because they were struggling with insufficient order intake from end users, sources said.
On top of this, buyers were unconvinced that HRC prices have hit rock bottom and chose to take a wait-and-see stance in the declining market.
Offers for HRC with lead times of four to six weeks were reported at €560-570 ($623-634) per tonne ex-works from integrated mills in the region. One supplier reported an offer at €580 per tonne ex-works.
But transaction prices were lower, at €540-550 per tonne ex-works, sources said.
“Mills are accepting €540-550 [per tonne ex-works] even for small tonnages because they need to fill order books,” a distributor in Germany said.
As a result, Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe was €552.71 per tonne on Tuesday, down by €3.29 per tonne from €556.00 per tonne on Monday.
The index was down by €12.29 per tonne week on week and by €49.12 per tonne month on month.
Even though buyers suggested there was still room for a price decline, producers claimed that current selling prices for HRC were already below cost.
“Mills choose volumes over prices and sell [HRC] below costs,” a second distributor said.
Sources suggested that mills might slow down or cut steel production in November-December to balance the market.
“It’s a tricky situation for the mills,” a steel service center source in northern Europe said. “On one hand, they must produce [steel] to secure free carbon credits for the next year, but on the other hand, they are losing money, selling steel at dumped prices in an oversupplied market.”
“Maybe producers will extend usual December maintenance and stoppages,” the source added.
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy at €552.50 per tonne on Monday, down by €3.75 per tonne from €556.25 per tonne on Monday.
The Italian index was also down by €12.50 per tonne week on week and by €47.50 per tonne month on month.
Sources reported offers for HRC from a domestic mill at €570-575 per tonne delivered on Tuesday, with lead times of end-October to early November, equivalent to €555-560 per tonne ex-works.
European suppliers were heard offering HRC with similar lead times to Italy, at €560-570 per tonne delivered.
Trading in Italy was poor, Fastmarkets heard.
“We will start booking volumes for November in about two weeks,” a domestic steel service center source said.
Meanwhile, import HRC offers from Asia were coming in at €525-535 per tonne CFR to Italy for shipment from end-October to November.
But sources pointed out that buying interest for imports was close to nil due to a small gap with domestic prices and all the trade restrictions in the EU.
Sources estimated tradeable prices for Asian imports at no more than €500 per tonne CFR, but no such offers were reported to be available in the market.
Published by: Julia Bolotova
