European HRC producers fail to secure increases; prices edge down

European hot-rolled coil prices edged down on Monday September 12, with mills struggling to achieve higher prices amid a persistent lack of interest in buying and with the widespread production cuts yet to have an impact, sources told Fastmarkets.
Traded volumes of HRC remained low in both Northern Europe and Italy amid high inventories at buyers, weak end-user demand for coil and a looming recession in Europe.

“The market is still weak and there [have been] no big transactions,” a distributor in southern Europe told Fastmarkets.

Integrated mills in Europe are struggling with surging energy costs and have recently been gradually reducing output.

But the impact of these output cuts has yet to be felt in the market, according to sources.

“Despite [steel] output cuts at European mills, there is no shortage of [HRC], or fear of short supply in the short- or mid-term because of low demand and the high stocks at SSC [steel service centers],” a trading source said.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €768.33 ($772.01) per tonne on Monday, down by €5.42 per tonne from €773.75 per tonne on Friday.

The latest calculation of the index was up by €6.66 per tonne week on week, but down by €5.84 per tonne month on month.

HRC offers in the region were reported between €800 and €850 per tonne exw for October and November delivery.

But where there was potential to secure a deal, some mills were ready to reduce prices to €780-790 per tonne exw, sources said.

Most buyers, however, indicated that the tradable HRC price was closer to €750-770 per tonne exw.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, meanwhile, was €762.50 per tonne on Monday, down by €5.00 per tonne from €767.50 per tonne on Friday.

The latest calculation of the Italian index was up by €17.50 per tonne week on week, but down by €7.50 per tonne month on month.

Buyer estimates of achievable prices were reported at €750-770 per tonne exw.

At the same time, mill sources reported transactions at €780 per tonne exw, but only for limited volumes, sources said.

Official HRC offers in Italy were heard at €800-820 per tonne exw.

Trading in Italy’s market was also quiet on Monday, sources said.

Imports
HRC offers from Turkey, Japan and India were reported at around €730-740 per tonne cfr to Italy, sources said.

There were no fresh transactions reported, but several buyers said that current import prices were workable, given the gap to domestic offer prices.

Long lead times were cited as the major risk factor for overseas bookings.

Published by: Julia Bolotova