European HRC producers refuse to give discounts for Q1 deliveries

European hot-rolled coil producers have been refusing to give discounts for first-quarter material, sources told Fastmarkets on Tuesday December 13.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €635.71 ($669.66) per tonne on December 13, up by €2.78 from €632.93 per tonne on December 12.

The latest calculation of the index is up by €6.33 per tonne week on week but down by €9.29 per tonne month on month.

Most mills in the region were offering a firm minimum of €650 per tonne EXW for first-quarter delivery HRC, market participants said.

Transactions for limited volumes of HRC were, however, heard at €630-640 per tonne EXW in Germany and the Benelux area.

Trading in the spot market has remained limited, with many buyers still assessing the situation.

“There is still no clarity on the trend’s sustainability,” a trading source in Germany told Fastmarkets, adding, “besides, everyone is waiting for [a major European steelmaker] to announce a price increase.”

Demand from end-use sectors, including the automotive industry, has picked up a bit, with some volumes seen back in the market, sources said.

Buyers, however, said that passing any price rise downstream was still quite tricky.

“The demand [for HRC] is not bad,” a second trading source in Europe said. “End users are looking for volumes, but it is hard for us to create a margin.”

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy was €626.67 per tonne on Tuesday, down by just €0.83 per tonne from €627.50 per tonne on Monday.

The latest calculation of the index is also down by €0.83 per tonne week on week but up by €1.67 per tonne month on month.

The Italian market was quiet in the past several days, with deals rare, sources said.

“Italian mills left the market in the middle of last week [the week to December 9], apparently to reconsider offers,” a distributor in Italy said. “Their price idea [for HRC] is a minimum €650 per tonne EXW, but that’s something we cannot afford for the moment.”

“We are in the transition period right now,” a trading source in Italy said. “The mills in Italy dropped prices below €600 [per tonne EXW] in November and closed gaps in order books; now they are aiming for a rise, but it is going to be difficult.”

Italian mills were able to offer coil with February delivery, sources told Fastmarkets.

Buyers reported bids and estimates of achievable prices at €600-630 per tonne EXW on Tuesday.

Producers, however, were aiming higher, at €650 per tonne EXW and above.

Some overseas HRC suppliers were back in the market with some higher offers during the week.

Notably, South Korean mills were offering HRC with late first-quarter 2023 delivery to Italy at €640 per tonne CFR.

Japan-origin HRC was offered to the nation at €635 per tonne CFR.

And one Turkish mill offered HRC to Italy at around €655 per tonne CFR, duty included.

These offer levels were not, however, considered workable by European buyers given that they were in line with offers from European mills, and lead times were much longer.

Published by: Julia Bolotova