European HRC producers cut offers; trading remains slow as buyers believe bottom yet to be reached

The trading lull in the European steel hot-rolled coil market continued on Friday March 15, with participants expecting prices to slide lower on poor demand and falling raw material costs, sources told Fastmarkets.
European HRC buyers have been keeping low profile for a few weeks now, abstaining from making purchases in a volatile market, sources said.

“Buyers only book [HRC] tonnages for a short run, since prices are dropping every week. On top of sluggish demand, we are also seeing falling raw materials prices,” a source at a steel service center in the Benelux region said.

HRC offers from integrated mills in northern Europe were reported at €700-720 ($764-786) per tonne ex-works, compared to €730-750 per tonne ex-works in late February. Buyers’ estimations of tradeable values were heard at €670-690 per tonne ex-works on Friday.

April- and May-delivery coil was said to be available from local suppliers.

Sources, however, pointed out that those prices were only indicative since trading has been nonexistent in the region lately.

“There are no inquiries and hardly any bids. Buyers are waiting; they are focused on ex-stock sales instead and there is severe competition in the secondary market since demand [from end-users] remains dull,” a mill source said.

Industry sources continued to insist that production cuts could help to stop the downtrend and balance supply and demand.

As a result of the above, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €692.50 per tonne on Friday, down by €2.83 per tonne from €695.33 per tonne on Thursday.

The index was down by €11.75 per tonne week on week and by €45.10 per tonne month on month.

In Southern Europe, Fastmarkets’ corresponding daily steel HRC index, domestic, exw Italy was calculated at €671.67 per tonne on Friday, down by €2.08 per tonne from €673.75 per tonne on Thursday.

The index was down by €7.08 per tonne week on week and by €59.16 per tonne month on month.

April-delivery coil was offered by a local supplier at €690 per tonne delivered (€680 per tonne ex-works).

Rare transactions were done at lower levels of €670 per tonne ex-works. Bids were reported at €650 per tonne ex-works.

But Italian buyers were mainly only making urgent bookings to cover immediate needs and have also been postponing restocking amid bearish expectations.

“Prices [for HRC] keep falling. And, naturally, buyers want to restock when the price hits the rock bottom. So, the market remains quiet so far,” a buyer in Italy said.

Import HRC prices have also been declining amid poor demand globally and amid a downtrend in raw material prices.

Despite that, import bookings were also rare.

“No price reduction helps buyers book new [import] orders when the domestic price is sliding non-stop,” a buyer source said.

HRC offers for June- and July-arrival material from Asian suppliers were heard at €575-600 per tonne CFR on Friday.

A limited tonnage of May-shipment HRC from Saudi Arabia was offered at €570 per tonne CFR to Southern Europe.

And two sources reported an HRC offer from Turkey at €640 per tonne CFR, including the anti-dumping duty.

Published by: Julia Bolotova