European steel HRC buyers wait for further price drops

European steel hot-rolled coil prices were largely flat on Tuesday February 20 amid quiet trading, but market participants were not ruling out the possibility of further downside during the rest of the month, Fastmarkets heard.

In Northern Europe, integrated mills could still offer HRC on quite short lead times – including April.

Offers of such material were heard at €740-760 ($797-819) per tonne ex-works. This compared with €780-820 per tonne ex-works announced in January for coil to be delivered in the second quarter.

Rare deals for limited volumes were heard at €720-730 per tonne ex-works in Germany and €740-750 per tonne ex-works in the Benelux area.

“Mills have started to grant discounts on HRC to secure bigger volumes, but traded volumes in fact remained low – there is no restocking,” a buyer source in Germany said.

“It is not a question of price [for HRC] these days, it is a question of demand [from end-users], which remains quite poor,” a source at a steel service center in the Benelux area said.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €725.25 per tonne on Tuesday, up by €0.25 per tonne from €725.00 the previous day.

The index was down by €22.25 per tonne week on week and down by €18.75 per tonne month on month.

Buyers were said to be pushing prices toward €700 per tonne ex-works, with most sources agreeing that this level would be “rock bottom” for mills.

“I don’t think mills would accept bids below €700 per tonne ex-works, they [steel mills] would rather trim output,” a second buyer in Germany said.

In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €723.33 per tonne on Tuesday, unchanged from a day earlier.

The index was down by €20.42 per tonne week on week and down by €12.09 per tonne month on month.

Offers from local suppliers for April-delivery HRC were heard at €740-750 per tonne delivered (€725-735 per tonne ex-works), with buyers’ estimates of tradeable values reported at €720-730 per tonne ex-works, and some bids reported even lower – €700 per tonne ex-works.

Transactions were heard at €720-730 per tonne ex-works, but for small lots of less than 500 tonnes, market sources said.

But some sources suggested that limited domestic supply, as well as difficulties in procuring overseas coil, would cushion local HRC prices from a sharp decline, despite chronically low demand.

“Acciaierie d’Italia [one of two local suppliers] has been running with only one blast furnace [BF] since end-January. So that leaves Arvedi as the single big supplier, with a couple of re-rollers which can supply small volumes,” a buyer in Italy said.

Meanwhile, new import offers from Asia were available for April shipment and July arrival, market sources said.

The current steel import safeguards, shielding the European market from excessive imports, will expire on June 30, 2024. Market sources suggested that these measures were likely to be extended, but it was not clear what changes would be made, so importing was considered risky.

The European Commission started an investigation into a possible extension of the measures in February, it announced earlier this month.

“Some Asian countries might get individual quotas after June 30 [and] we might have different allowances. So, imports are not viable for most buyers,” a trading source in Italy said.

HRC from Vietnam was offered to Italy at €620 per tonne CFR.

At the same time, offers from Egypt, Japan and Taiwan were reported at €650 per tonne CFR.

Published by: Julia Bolotova