The recent attempts by European steel mills to push for higher prices were broadly unsuccessful because there was no support from end-user demand.
In general, tradeable prices for HRC in northern Europe, reported by buyer sources, remained within the range of €630-650 ($676-697) per tonne ex-works, in line with what was seen in the market before the summer stoppages.
This was some way below official offers that were pushing toward €700 per tonne ex-works.
Mills in the region were offering October-November delivery coil, sources said. But buyers were postponing purchases, booking only “what’s strictly necessary” and were assessing the market situation.
Sources said that the wait-and-see stance taken by the market could be partially explained by expectations of large tonnages of cheaper imports, waiting at European ports to be customs-cleared, ready to flood the European market from October 1, when the new EU import safeguard quota period begins.
“According to our estimate, more than half-a-million tonnes [of HRC] is sitting in ports and awaiting the new allocation,” a trading source in Germany told Fastmarkets. “Those volumes were bought at very cheap prices, way below €600 per tonne CFR, so when this material enters the market, domestic prices [for HRC] will be under heavy pressure.”
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €648.75 per tonne on September 7, up by €0.15 per tonne from €648.60 per tonne on September 6.
The index was down by €1.25 per tonne week on week but up by €2.92 per tonne month on month.
And Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index, domestic, exw Italy, was €634.17 per tonne on September 7, down by €0.83 per tonne from €635.00 per tonne on September 6.
The Italian index was also down by €0.83 per tonne week on week and by €2.08 per tonne month on month.
Buyers’ estimates of achievable prices were reported at €640-650 per tonne delivered, which would net back to about €625-635 per tonne ex-works.
Mills were pushing offers closer to €700 per tonne delivered (€685 per tonne ex-works), but such prices were not achieved in deals.
Trading in Italy’s market was also quite dull, and buyers believed that there was no room for a substantial price increase in September.
“There were hopes for restocking, but buyers are postponing purchases to late September-early October. Everyone wants to see the situation with imports – it will be a deal-breaker for the market,” a trader in Italy said.
New import offers from an Indian supplier for December-arrival HRC were heard around €600 per tonne CFR to Italy.
Taiwan-origin material with October-November shipment was on offer to the country at a similar price of €600-610 per tonne CFR.
South Korea-origin HRC for October-November shipment was offered at €620-625 per tonne CFR to Italy.
And finally, several sources said that Ukraine-origin HRC was on offer to Italy at €600 per tonne CFR, for late October-early November shipment.
Published by: Julia Bolotova