Domestic prices for steel hot-rolled coil (HRC) in Europe increased on September 9 in both Northern Europe and Italy, with buyers resisting the increases from mills, but tighter availability and higher energy costs putting pressure on producers, sources told Fastmarkets on Wednesday.
In Northern Europe, trading activity was slowly picking up, but sources said demand in the market was still weak, with many market participants remaining in a wait-and-see mode. Mills were targeting higher levels because of reduced availability and energy cost pressure, but buyers were resisting these price increases, sources said.
On Wednesday, deals were reported at €750 ($872) per tonne ex-works, in line with previous levels heard on September 8. Offers from mills were reported within the range of €750-790 per tonne ex-works, but sources said the upper end of the range was considered too high.
A producer was heard targeting prices around €800 per tonne ex-works by the end of the year but no official offers were quoted at this level.
“Buyers are complaining about higher offers, as demand remains underwhelming,” a distributor source said on September 9, adding that “both electricity and gas [prices] are moving sharply higher, squeezing margins [for mills].”
As a result, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €750 per tonne on September 9, up by €7.50 per tonne from €742.50 per tonne on September 8.
The index was down by €5 per tonne week on week but up by €32.50 per tonne month on month.
In Italy, the market was still quiet with no fresh trading activity reported. “Demand in the downstream is low, and thus there are low negotiated volumes with the producers,” a buyer said on Wednesday.
A supplier indicated workable levels for October delivery on the same day at €750 per tonne delivered, which nets back to €730 per tonne ex-works.
The same supplier said that buyers were reporting minimum levels for material at €710-720 per tonne ex-works but discarded these prices as too low, along with other sources in the market, who said these levels were not seen anymore.
Two buyers said mills were offering material at €730-740 per tonne ex-works, but deals had yet to materialize.
A source at Metinvest’s Ferriera Valsider mill confirmed that it had restarted production of HRC after declaring a force majeure in late August due to an engine issue. However, the same source said that “the backlog is too large,” so it was not offering any new spot volumes yet.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €732.50 per tonne on September 9, up by €6.25 per tonne from €726.25 per tonne on September 8.
The index was up by €10.83 per tonne week on week and €23.75 per tonne month on month.
