European HRC prices remain largely flat despite bullish sentiment at producers

European steel hot-rolled coil prices were largely flat on Friday October 4 despite producers’ bullish moves earlier in the week, with buyers questioning the sustainability of the uptrend because of a lack of demand, sources told Fastmarkets.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €540.83 ($596.68) per tonne on Friday, down by €1.67 per tonne from €542.50 per tonne the previous day.

The index was down by €4.38 per tonne week on week and by €49.17 per tonne month on month.

Trading remained quiet in the region. Buyers questioned the recent price increase announced by a leading European producer earlier in the week.

“The market cannot accept [€590 per tonne as a base price for HRC]. Demand is not strong enough to support that rise,” one buyer source told Fastmarkets. “But it was clear that prices [for HRC] have fallen below costs for European mills.”

Buyers estimated tradeable values at €520-540 per tonne ex-works on Friday.

One buyer estimated achievable prices in the range of €510-520 per tonne ex-works, but market sources said that mills were unlikely to accept such low prices.

One integrated steelmaker in the Benelux area was offering HRC at €540 per tonne ex-works, but trade sources said that the mill was also considering a price rise, following the move by a market leader.

Market sentiment would become clearer in the week starting October 7, industry sources said, when public holidays in Germany and in Asian countries were at an end.

“I think, price-wise, we are currently at rock bottom in Europe,” a second buyer said.

“It is clear that [EU mills] will still accept lower prices for fourth-quarter-delivery HRC,” a third buyer said. “The price increase from [the leading European producer] helps to stabilize the market, but [I am] not so sure about actual price rises when demand is so low.”

In Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy was €535.00 per tonne on Friday, unchanged from the previous day.

The Italian index was down by €6.67 per tonne week on week and by €55.00 per tonne month on month.

Buyer estimates for the workable market price were €520-540 per tonne ex-works, while the majority of sources estimated the market at €530-540 per tonne ex-works on Friday.

One integrated Italian supplier withdrew its offers from the market earlier this week and was expected to come back with new prices.

“After [the European producer’s] price rise this week, other producers also withdrew offers and [were now planning] price rises. We will see how the market reacts,” a buyer in Italy said.

As for imports, the markets have remained quiet due to public holidays in Asia. But market sources suggested that imports would remain uncompetitive in Europe because of trade restrictions, long lead times and the small gap to European prices.

“We do not have new offers from Asia, but China has become more bullish after a stimulus package was announced so we expect higher offers,” a second buyer said.

Published by: Julia Bolotova