European hot-rolled coil prices held steady on Tuesday January 13, despite quiet trading, with positive sentiment in the domestic market largely being driven by regulatory updates limiting imports, sources told Fastmarkets.
The European steel markets are still restarting after the winter holiday break, with buyers in no rush to restock, Fastmarkets understands.
“Trading remains thin,” a mill source said. “Buyers rushed their bookings in the fourth quarter ahead of [the implementation of the] Carbon Border Adjustment Mechanism (CBAM) and booked more than usual, so there is now no immediate need to restock.
“But we will see restoking for second-quarter tonnages at the end of January-start of February,” the mill source added.
In terms of hot-rolled coil, the mills were said to be largely sold out for February delivery, with only minor tonnages left at some suppliers. Prices for these tonnages were hovering around €630-640 ($735-747) per tonne ex-works.
For March-April delivery, mills were aiming to get prices closer to €650-670 per tonne ex-works, source said.. And some suppliers were even suggesting higher price ideas for second-quarter deliveries – “testing the waters” at around €680-700 per tonne ex-works, according to one market participant.
Buyers, however, said that such levels remained just “wishful thinking,” given the still-slow end-user demand.
“We can realistically speak about €650 being widely achieved soon, but going any higher will be complicated because it’s hard to pass on [any] increase in prices to the downstream market,” a source at a steel service center in Germany told Fastmarkets.
Another source said there had been a transaction for a small tonnage of March delivery HRC in Germany at €650 per tonne ex-works on Tuesday.
But most buyer sources still put the workable level at €630-640 per tonne ex-works.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €638.33 per tonne on January 13, up by just €2.70 per tonne from €635.63 per tonne on January 12.
The index was up by €8.33 per tonne week on week and by €16.66 per tonne month on month.
In Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €629.27 per tonne on Tuesday, up by €1.77 per tonne from €627.50 per tonne on Monday.
The index was up by €6.15 per tonne week on week and by €18.02 per tonne month on month.
Trading in the Italian market also remained slow, however, with only minor tonnages booked. according to sources.
Offers for March delivery HRC were heard at around €630–650 per tonne ex-works, depending on the supplier. Some producers still had some February tonnages left, sources said.
And buyers estimated the tradable price for HRC in Italy at around €620–640 per tonne ex-works on Tuesday.
But very few new import offers have been reported since the implementation of CBAM regulations, sources said.
“There are some import tonnages in ports and on the way to Europe, but there are very few new offers,” a buyer in Italy said.
“CBAM has brought a lot of confusion to the market,” the buyer added.
HRC from Saudi Arabia, meanwhile, was of offer to Europe at €530 per tonne CFR, excluding CBAM costs, sources said, and with default emissions values not outlined for steel products for Saudi Arabia, they therefore fall under the default values for “other countries and territories.”
CBAM costs for HRC from this origin will therefore exceed €200 per tonne, unless actual emissions data can be verified.
CBAM implementation was expected to increase import prices on flat steel by perhaps €35-600 per tonne, depending on the country of origin, assuming the use of default emissions values to calculate the CBAM charge.
I addition, steel safeguard quotas for HRC were fully used up by some suppliers less than two weeks into the new reporting period.
