European HRC producers struggle to fill order books; buyers focus on destocking

European hot-rolled coil producers are struggling to fill their order books, while buyers are delaying purchases due to full stocks and downbeat sentiment, sources told Fastmarkets on Friday November 11.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €645 ($649.75) per tonne on Friday, down by €3.33 per tonne from €648.33 per tonne on Thursday.

The latest calculation of the index was down by €2.50 per tonne week on week and down by €73.75 per tonne month on month.

Several transactions for small volumes of HRC were reported in the region at €630-650 per tonne EXW by buyer sources.

Meanwhile, producer sources in Germany indicated the workable level at €650 per tonne EXW minimum, claiming that this price is already very close to the cost line.

Most producers in the region were still offering December-rolling coil to the market.

Mills were reluctant to give firm offers for first-quarter production HRC in light of the weak market fundamentals.

“Producers’ idea is to increase prices for January-February production, but it is unrealistic for the moment because there is lack of demand,” a distributor in the region said.

Meanwhile, buyers still believe there is room for a price decline owing to extremely poor demand and oversupply in the market.

Notably, steel-service centers and distributors across Europe are still struggling to reduce the level of inventories ahead of the year-end.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was €625 per tonne on Friday, up by €5 per tonne from €620 per tonne on Thursday.

The latest calculation of the Italian index was down by €40 per tonne week on week and down by €90 per tonne month on month.

One buyer source reported a transaction by a local mill at €620 per tonne CPT, which nets back to €600 per tonne EXW.

Producers in the nation, meanwhile, reported the minimum offer level at €650 per tonne EXW.

Distributors in the nation estimated the achievable price level between €620 and €650 per tonne EXW, depending on volume.

Import HRC offers also inched lower at the end of the week.

Notably, HRC offers from Japan and South Korea to Italy were heard at €570-585 per tonne CFR, compared with €600-620 per tonne CFR earlier this week. Producers from Southeast Asia were able to offer coil with January shipment to Europe.

– Julia Bolotova