European HRC prices mostly flat despite bullish mills pushing for increases

European hot-rolled coil producers were targeting higher prices on Wednesday July 5, but the uptrend was hindered by persistently slow trading, sources told Fastmarkets.In Northern Europe, buyers reported tradable values at €670-700 ($730-763) per tonne EXW, while offers from one integrated mill for September-delivery HRC were heard at €700-710 per tonne EXW.

Sources had reported a slight pick-up in trading in recent weeks, but traded tonnages were limited, with buyers still preferring hand-to-mouth bookings only.

“Now we mainly see buying activity to cover possible shortages of coil because the summer holidays are almost here and some mills might prolong the holiday period for maintenance. On top of that, technical issues at some [French and German mills] might reduce the availability of material and [extend] lead times,” one trading source told Fastmarkets.

Some producers are expected to announce price rises of €30-50 per tonne for September HRC before the summer stoppages, which one distributor described as “a traditional tactic.” 

In general, however, market participants said there was no room for large price rises because demand from end users remains stable at low levels, while steel service centers and distributors are struggling to increase downstream prices.

Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe was calculated at €681.67 per tonne on Wednesday, up by €0.21 per tonne from €681.46 per tonne on July 4.

The latest calculation of the Northern European index was up by €11.04 per tonne week on week, but down by €41.66 per tonne month on month.

Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €657.92 per tonne on Wednesday, stable day on day.

The Italian index was up by €12.74 per tonne week on week, but down by €12.08 per tonne month on month.

The price increases announced by Italian mills earlier in the week were not sealed in deals, however. So while official offers came in at €680-700 per tonne EXW, transactions were actually reported at around €650-660 per tonne EXW. Buyers said the tradable level was €640-650 per tonne EXW.

One source reported a sale of a limited tonnage of September-delivery HRC at €680 per tonne EXW, but this was not widely confirmed by other market participants.

The major obstacle for HRC price rises in Italy is slow demand from end users, sources told Fastmarkets.

“Prices for tube and for cut-to-length HRC are still low. We need to increase them by €50-60 per tonne,” a steel service center source said.

HRC import prices were stable day on day, with interest in overseas bookings recently limited by stretched lead times. Most suppliers are already offering September-October shipments, with November-December arrivals.

A sale of India-origin HRC for mid-October shipment was heard at €600 per tonne CFR to Italy late in the week to June 30. And HRC was on offer from one Japanese mill at €630 per tonne CFR for September shipment, while smaller-volume transactions reported at €620 per tonne CFR to Italy in late June.

Other suppliers from Asia were aiming for €610-620 per tonne CFR for September-shipment HRC to Italy.

South Korean suppliers remain out of the market and are unlikely to come back with new offers any time soon, with suppliers having exceeded their quota volumes for the next quarter and therefore inactive, according to market participants.

Published by: Julia Bolotova