Persistently weak demand, combined with an oversupplied market, was putting downward pressure on HRC prices, Fastmarkets understands.
According to Fastmarkets’ sources, trading should remain quiet in the summer period, and any improvement can be expected in the third quarter, when the effects of the new EU import safeguard measures for steel are anticipated to be felt.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €629.38 ($674.72) per tonne on Wednesday, down by €0.62 per tonne from €630.00 per tonne on Tuesday.
The index was down by €1.50 per tonne week on week and by €7.99 per tonne month on month.
Mills in Northern Europe were heard offering HRC at €640-650 per tonne ex-works but, according to Fastmarkets’ sources, producers were likely to agree to sell around €630 per tonne ex-works.
Market participants estimated tradeable prices at €620-630 per tonne ex-works.
“Demand is bad. Nobody is restocking,” a producer told Fastmarkets, adding that summer holidays are approaching and a rebound in HRC prices can be expected in the third quarter.
The source said that in this period, some positive effects of the new EU safeguard measures could be felt in the market.
A buyer told Fastmarkets that demand from end consumers of flat steel products was favorable, but the market remained quiet because producers were in a difficult situation — they were hungry for orders while negotiations for the long-term contracts with the automotive industry were still running.
The buyer source said that most distributors were also in wait-and-see mode.
Regarding imports, HRC from Asia was not so attractive due to similar prices to those in the domestic market and amid uncertainties related to the safeguard measures.
“Prices in Asia are not interesting. Thus, the possibility that imports could increase supply in the European market is limited,” the buyer source said.
“The big competition is between the steel service centers which have too high stocks,” the source said, adding that some production cuts might be necessary to balance the market.
Import offers of Asian HRC to Northern Europe were heard at €600 per tonne CFR.
Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €625.00 per tonne on Wednesday, stable day on day.
The Italian index was down by €3.13 per tonne week on week and by €5.00 per tonne month on month.
Suppliers in Italy were heard offering HRC at €640-650 per tonne delivered, which nets back to €630-640 per tonne ex-works.
But market participants put the workable price for domestic material at €620-630 per tonne ex-works.
Import offers of Asian HRC were limited in the Italian market, with buyers estimating the tradeable price at €600-610 per tonne CFR.
Published by: Darina Kahramanova
