European HRC prices seek bottom

European hot-rolled coil prices inched downward on Thursday June 9, but were getting close to the market bottom, Fastmarkets heard.Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €944.29 ($1,011.26) per tonne on Thursday, down by €5.71 per tonne from €950.00 per tonne the previous day.

The index was down by €54.71 per tonne week on week and by €234.04 per tonne month on month.

Offers from mills in the region were heard at €950 per tonne exw, with one transaction for a small tonnage reported at €940-950 per tonne exw. Some estimates from buyers were heard at €900-950 per tonne exw.

Trading in the region continued to be slow, with very few transactions reported.

“Trading remains quiet, and not every mill is even in the market,” a trading source in Germany said.

Producers in the region could still offer coil for July shipment.

Most sources believed that the HRC price in the region would not sink below €900 per tonne exw, because sales would then be loss-making for the mills.

Market participants suggested that distributors in the region may need to restock toward the end of June or early in July and that this restocking activity would help to stabilize HRC prices.

There was market chatter that producers in Northern Europe will reduce output to balance demand and supply, but nothing has been announced officially.

“Everyone keeps talking about a reduction [in output], but it is not clear whether the mills are actually doing it or just talking about it,” another source said. “Maybe [mills] will just take an extra maintenance week during the summer.”

Offers from Central European mills were reported by multiple sources at €900-910 per tonne ex-works, while at least two producers in the region were heard offering HRC at even cheaper prices of around €850-870 per tonne ex-works.

Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy was €876.67 per tonne on Thursday, down by €13.33 per tonne from €890.00 per tonne on Wednesday.

The Italian index was down by €61.33 per tonne week on week and by €281.66 per tonne month on month.

Offers from local mills were reported at €900 per tonne ex-works, but buyers said that it was possible to negotiate a lower selling price of around €860-880 per tonne ex-works.

Domestic producers were able to offer material for July delivery.

Imports
Stabilization in import prices could also signal an end to the downtrend in HRC prices, sources said.

August-shipment HRC from Turkish mills was offered to Southern Europe at €820 per tonne cfr, including anti-dumping duty. HRC from Japan and South Korea was available at slightly higher prices of €840-850 per tonne cfr Southern ports.

Indian producers were the most aggressive, with August-shipment HRC offers of €800 per tonne cfr Southern ports. But these were offers of boron-alloyed material, sources said, and buying interest for boron-added HRC was limited because such material was not suitable for welding and “not good for load-bearing structures.”

Indian mills add boron to their HRC so that it does not become subject to the country’s recently-imposed 15% export duty.

Published by: Julia Bolotova