European HRC producers aim for substantial rises in Q1 2024, subdued demand seen as major concern

European hot-rolled coil producers are seeking substantial price increases for the first quarter of 2024, but slow consumption remains the biggest concern, sources told Fastmarkets on Wednesday December 20.
Integrated steelmakers in Northern Europe are targeting €720-750 ($788-821) per tonne ex-works for February-March delivery HRC, Fastmarkets heard.

But those values are yet to be sealed in deals because tradeable values indicated by buyers are around €680-700 per tonne ex-works, with transactions reported within that range in December.

Sources reported several bookings during the week within the range of €680-700 per tonne ex-works for February delivery, but largely for small tonnages.

Northern European integrated mills were said to be largely sold out for February-delivery material, but sources suggested they might still have free volumes for the spot market.

“Mills claim they are booked, taking into consideration tonnages they reserved for automotive industry. In the case that the automotive industry books less, some [HRC] tonnages will be released for spot trading in January-February,” a distributor in the region told Fastmarkets.

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €695.13 per tonne on Wednesday, up by €4.71 per tonne from €690.42 per tonne on Tuesday.

The index was up by €7.00 per tonne week on week and by €40.13 per tonne month on month.

In Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index domestic, exw Italy at €688.33 per tonne on Wednesday, increasing by €2.08 per tonne from €686.25 per tonne on Tuesday.

The Italian index was up by €13.75 per tonne week on week and up by €53.33 per tonne month on month.

During the second half of December, €700 per tonne delivered (€680-690 ex-works) was largely achieved in deals for HRC in the nation, sources said.

New offers from Italian steelmakers for February-March delivery HRC stood at €720-730 per tonne delivered, while one European steelmaker was offering coil to the nation at €740 per tonne delivered.

On Wednesday, trading was close to zero in Italy due to the seasonal slowdown, but most sources suggested that new target prices for HRC will be achieved in Italy after the Christmas break.

“We don’t have that many buying options given all limitations in place for imports. And output is reduced at the EU mills so buyers will have to pay,” a trading source in Italy told Fastmarkets.

“Slow consumption remains the major concern for the market. We expect end-user demand in 2024 to be 10-15% below the 2023 levels,” he added.

In the secondary market, HR sheet was traded around €770-780 per tonne CPT during the week to Wednesday, but steel service centers said they need to increase downstream prices by “at least €50 per tonne” due to mounting costs.

Import HRC offers to Europe have been very limited recently.

Several sources reported a booking of a large HRC tonnage of India origin to Italy around €640-645 per tonne CFR for February shipment. The booking was reportedly done at the end of the previous week.

On Wednesday, offers from Indian mills to Europe were heard at €650 per tonne CFR minimum.

Turkey-origin HRC with February shipment was offered to Italy at €695 per tonne CFR, including the anti-dumping duty. This level was deemed too high by EU buyers.