European HRC producers consider higher offers amid slow demand

Prices for hot-rolled coil in Europe were broadly stable on Monday June 10 amid a continuing standstill in trading, sources told Fastmarkets.

End-user demand remained poor but producers were still targeting higher prices ahead of the long-term contract negotiations with customers, expected to start in mid-June.

Bullish sentiment among producers was supported by the news that EU import safeguards had been extended for two years and the imposition of a 15% cap on residual quotas for HRC, which should limit supply of Asian material, which was being offered at competitive prices.

A steel mill in the Benelux area was heard raising its spot HRC offer price by €20 ($21.59) per tonne to €650-660 per tonne ex-works on Monday, sources told Fastmarkets.

Another European integrated mill was heard withdrawing its offers at the end of last week, with market participants expecting it to come back with new higher offers at the end of this week. There was no official information on this, however.

But buyers in Northern Europe were skeptical there was space for price increases due to slow consumption and a downtrend in the raw materials market.

“Distributors and steel service centers are not stockpiling,” one steel service center source in Germany told Fastmarkets.

According to buyer estimations, the workable price level in Northern Europe was in the range of €620-640 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €634.75 per tonne on Monday, increasing by €1 per tonne from €633.75 per tonne on Friday.

The index was up by €1.42 per tonne week on week and down by €5.25 per tonne month on month.

Fastmarkets’ daily steel HRC index domestic, exw Italy was calculated at €630.00 per tonne on Monday, down slightly by €0.83 per tonne from €630.83 per tonne on Friday.

The index was up by €0.62 per tonne week on week, but down by €7.08 per tonne month on month.

Last week, July-delivery HRC was offered by an Italian integrated mill at €650 per tonne delivered, which nets back to about €630-635 per tonne ex-works.

The mill has sold some quantities and is no longer in the market, according to a buyer source, who added that the mill will probably come back with slightly higher prices.

Buyers estimated the tradeable market level at €630 per tonne ex-works.

Regarding imports, a buyer source told Fastmarkets that Asian suppliers were not very active at present, awaiting more clarity about the new safeguard adjustments.

Turkey was heard increasing its export offers for HRC to Europe by about €20 per tonne.

On Monday, offers of Turkish material were heard at €600-630 per tonne CFR, including the anti-dumping duty.

Published by: Darina Kahramanova