European HRC prices mainly flat in quiet post-holiday market

European buyers and sellers of steel hot-rolled coil have been largely quiet in the post-Easter holiday market, with prices mostly flat, sources told Fastmarkets on Tuesday April 11.
The HRC market was slow in both Northern Europe in Italy on Tuesday. Most buyers and mills were still out of the market and there was little or no trading reported.

“Buyers will return to the market next week [starting April 17] at the earliest,” one mill source told Fastmarkets.

Markets participants were digesting the potential effects of delays to HRC supplies from ArcelorMittal because of accidents at two of its plants and the potential price trend in the second quarter of the year.

“[ArcelorMittal] has already announced long delays on HRC deliveries, of four-to-six weeks during the second quarter, with possible effects [carrying on] into July/August,” a trading source in Europe said.

“We’ve heard that mills would like to ask [a price of] €900 [($979) per tonne ex-works] but the market is not ready for that – even now – given all the problems with Tata Steel and ArcelorMittal’s Gijon and Dunkirk [plants],” a second trading source in Northern Europe said.

Most buyers in Northern Europe estimated the tradable price for HRC in the region between €830 and €860 per tonne ex-works.

Mills in Northern Europe had hoped to achieve €900 per tonne ex-works for July-delivery HRC due to expected restocking amid tightening supplies.

Offers of Italy-origin coil to the region were reported at €880-900 per tonne delivered.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €855.00 per tonne on Tuesday, down by €2.00 per tonne from the most recent calculation €857.00 per tonne on Thursday last week.

The index was also down by €3.94 per tonne week on week but up by €24.17 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy, at €853.13 per tonne on Tuesday, down by €1.87 per tonne from €855.00 per tonne on April 6.

The index was up by €1.88 per tonne week on week and by €42.47 per tonne month on month.

Sources reported that transactions for July delivery HRC were closed at €870-880 per tonne delivered, which would be equivalent to €850-860 per tonne ex-works.

But, in general, trading in Italy was slow after the long holiday weekend.

Producers in Italy were sold out for June-delivery coil, and expected good order books and tighter supply to drive HRC prices further upward in the second quarter.

Buyers, meanwhile, reported difficulties passing on the higher prices to downstream customers.

HR sheet was reported trading at €900 per tonne ex-works in the secondary market in the week to April 6.

HRC offers from India and South Korea were heard at €750-770 per tonne CFR for June/July shipments.

An offer from a Japanese mill for July shipment HRC was reported at €800 per tonne CFR to Italy.

But market participants said that European buyers could not fully rely on imports to fill the gap in domestic supplies.

“Overseas coil offers are quite limited,” a trading source in Italy said. “Besides, import suppliers cannot offer the full range of sizes and grades we need.”

Published by: Julia Bolotova