They described the market for HRC in Europe as “quiet, if not dead” and said it was the “the weakest in years.”
“Domestic [HRC] prices are under heavy pressure due to oversupply, moderate automotive consumption/buying, a weak construction market and low import prices,” one buyer in Northern Europe told Fastmarkets.
A second bujyer said: “Nobody is in a rush to buy. The market is oversupplied and lead times are short.”
Restocking has not started and steel service centers (SSCs) and distributors were not looking for tonnages in light of the weak demand for steel downstream.
“SSCs have sufficient stock and, in fact, are trying to reduce their inventories,” a trading source in Europe told Fastmarkets. “There is fierce competition, especially between SSCs, because of [too] high inventories and cashflow needs.”
Buyer estimates of tradable prices for HRC were reported at €560-590 ($619-652) per tonne ex-works, depending on tonnage. But the lower end of the range was said to be too close to the cost line and no trades have been reported.
In Germany, offers were reported at €590-600 per tonne ex-works, while in the Benelux area offers came in at €570-610 per tonne ex-works, depending on supplier.
Sources said production cuts could help producers to stop the downtrend in prices and they expect some steelmakers to announce blast furnaces closures in September-October – although no official announcements have been made so far.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €590.00 per tonne on Wednesday, unchanged from Tuesday.
The index was down by €7.00 per tonne week on week and by €30.50 per tonne month on month.
In Southern Europe, Fastmarkets’ corresponding daily steel HRC index, domestic, exw Italy was also unchanged at €590.00 per tonne on Wednesday.
The Italian index was down by €5.00 per tonne week on week and by €30.63 per tonne month on month.
Buyers put the achievable price level at €590-600 per tonne CPT (€580-590 per tonne ex-works), depending on the tonnage.
A small transaction was reported at €600 per tonne CPT but, in general, activity remained limited amid slow end-user demand and a lack of clarity regarding the future price direction.
Import offers were stable to slightly weaker week on week, sources said.
Offers from Turkey were reported at €560 per tonne CFR, including the anti-dumping duty, for lots above 3,000 tonnes, with early-to-mid November shipment.
And an offer from India was heard at $600 per tonne CFR.
Buyers continued reporting HRC offers from China at €540-550 per tonne CFR, including import duties, but no fresh bookings were reported.
“The gap [between domestic and import prices] of just €30-40 per tonne is just not worth the risk. I think more [European buyers] would prefer to book [HRC] of European origin in the next restocking round,” a buyer in Italy told Fastmarkets.
Published by: Julia Bolotova
