European HRC producers aim for higher offers, buyers cautious as lead times extend

The European steel hot-rolled coil market remained quiet on Friday March 31 while waiting for higher offer prices to be issued by the major steelmakers, Fastmarkets has heard.
Even though official announcements had yet to be made, the expected offer level was expected to be €900 ($979) per tonne ex-works for July-delivery coil.

“Officially, the price increase [for HRC] has not been announced to the market yet,” a trader in the region said, “but if we approach [major European mills] for July quantities [of HRC], they quote at €900 [per tonne ex-works].”

Apparent steel demand remained dull in the region, with mainly hand-to-mouth bookings reported recently.

“There is a lack of confidence among buyers. They do not see real steel demand being enough to support the [HRC price] rise,” a distributor source told Fastmarkets.

“HR sheet is traded at €900-920 per tonne ex-works in the secondary market, so an HRC price of €900 per tonne ex-works looks unrealistic for the moment,” a second distributor said.

Some buyers were estimating the workable price about €840-860 per tonne ex-works, and expected prices to correct downward in summer.

But other market sources suggested that the HRC market in Europe was likely to stabilize in the near future, especially because supply was likely to reduce.

Since January 2023, a number of European mills have restarted steelmaking capacities taken offline in the last month of 2022. But recent fire accidents at ArcelorMittal’s blast furnaces (BFs) in Gijon, Spain, and Dunkerque, France, plus a planned maintenance stoppage at Dabrowa Gornicza in Poland, and a BF stoppage at Tata Steel in the Netherlands, were expected to keep supply tight.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €856.25 per tonne on Friday, up by €8.62 per tonne from €847.63 per tonne a day earlier.

The latest calculation of the index was also up by €3.12 per tonne week on week and up by €62.50 per tonne month on month.

The calculation of Fastmarkets’ daily steel HRC index, domestic, exw Italy was €845.00 per tonne on Friday, up by €9.62 per tonne from €835.38 per tonne on Thursday.

The latest calculation of the index was up by €18.49 per tonne week on week and by €60.00 per tonne month on month.

Offers from domestic producers were heard around €850-860 per tonne ex-works for June delivery, while buyers’ estimates of achievable prices were closer to €830-840 per tonne ex-works. But producers said that such prices were not acceptable to them.

Mills in the country were able to offer June-July delivery coil, sources said.

Trading in Italy’s market also remained subdued, with buyers seen to be avoiding the purchase of big tonnages.

Meanwhile, the gap between domestic and import prices has been increasing recently, and lead times from domestic mills have been extending, making overseas bookings more attractive.

One Indian producer was offering June-shipment HRC to Italy at €750 per tonne CFR. Some sources said that by the end of the current week, however, this price was no longer available.

HRC from Vietnam and South Korea was on offer at €770 per tonne CFR to Italy.

Japan-origin coil was on offer at $830-840 per tonne CFR for June shipment, with deals for some limited lots reported within that range earlier in the week.

There was also market chatter about a June-shipment HRC cargo from Turkey sold to Italy at €800 per tonne CFR, including anti-dumping duty. But this was not confirmed at the time of publication.

Other sources reported offers from Turkey at €800 per tonne CFR for June shipment.

Published by: Julia Bolotova