European HRC prices under pressure, market sentiment for Q1 varied

European hot-rolled coil market prices remained stable following the holiday period Jan. 7, amid downward pressure from weak automotive demand and ever-high energy and transport costs, with transaction activity and updated offers not expected to accelerate until next week, sources told S&P Global Platts.

Offer prices from European hot rolled coil suppliers have declined by approximately 30% since their peak midyear 2021, according to a German distributor source, who said he would not be willing to buy HRC for more than Eur900/mt ex-works Ruhr.

The same source said there was a “serious lack of material” in Europe, though an influx of cheaper imports could alleviate some of the pressure. However, the European Commission’s Jan. 10 revision of the safeguard quota system has the market very cautious.

Supply chain participants are waiting for yearly automotive contract negotiation to conclude, though some sources have said the low supplies of semiconductors are likely to continue.

Downward pressure is greater on hot rolled coil values than on cold rolled and galvanized material, the same German distributor said.

“Right now, there is no sign of improvement for hot-rolled coil, it is the worst I’ve seen the market in a long time” he said.

On the mill side, a German mill source was confident about an increase in demand, citing an HRC price at Eur950-960/mt ex-works Ruhr and reporting full order books for January-February.

“The second quarter we will see better demand and higher prices than we are seeing now,” he said. “We are well booked for January and February.”

— Catherine Brown