European HRC producers maintain high offers, buyers hold back

Trading in the European hot-rolled coil market remained quiet on Tuesday September 6 despite massive output cuts announced by producers recently.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €765 ($758.94) per tonne on Tuesday, up by just €3.33 per tonne from €761.67 per tonne on Monday.

The calculation of the index was up by €30 per tonne week on week but down by €60.83 per tonne month on month.

Producers in the region maintained official offers for HRC at €800-850 per tonne exw. But buyers’ pricing ideas were lower, at €750-760 per tonne exw.

A sale of Italy-origin HRC to Germany was reported at €800 per tonne delivered earlier this week.

Traded volumes, however, have remained limited – buyers are reluctant to accept higher HRC offers against a backdrop of persistently weak end-user demand and poor prospects for steel consumption in Europe given fears of a looming recession.

On the other hand, European producers claimed the price increase was absolutely necessary because production costs have soared recently.

“We will see if the market accepts higher offers; if not, we’d rather stop than do a loss-making sale,” a mill source in Germany told Fastmarkets.

European steelmakers have been gradually reducing output recently to adjust to weak market fundamentals; however, the effects of the production cuts have yet to show up.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was €752.50 per tonne on Tuesday, up by €7.50 per tonne day on day.

The calculation of the Italian index was up by €47.50 per tonne week on week but down by €24.50 per tonne month on month.

Official offers from mills in the country were reported at €800-820 per tonne exw, but no trading has been reported at this level so far.

Some buyers estimated the achievable level for HRC in Italy at €740-750 per tonne exw while noting that buying activity has been very weak recently.

The tradeable level for HRC in the nation was closer to €780 per tonne exw, one producer said.

Several sources claimed that Arvedi – one of the major local steelmakers in the region – is mulling production stoppages in case market activity does not pick up.

“Arvedi has stopped hot flow completely in August – they will do the same in September if buyers reject price rises,” a trading source told Fastmarkets.

HRC offers from Asia to Italy were reported at €670-680 cif for delivery at the end of 2022 and early in 2023.

Published by: Julia Bolotova