European steel HRC market quiet as mills fail in push for price rises

Prices for steel hot-rolled coil in Europe were broadly stable on Thursday September 7, with sentiment turning pessimistic because of subdued demand and an expected influx of imports starting in October, industry sources told Fastmarkets.

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