European producers have been pushing for higher HRC prices since the beginning of October, citing rising production costs and squeezed margins, but so far their bullish moves have only brought some stabilization.
“The market fundamentals remain weak,” a buyer source in Northern Europe said. “[HRC] prices are still under pressure and, because of that, most buyers are in wait-and-see mode. The price of €590 [$636 per tonne] that ArcelorMittal announced a couple of weeks ago isn’t realistic now.”
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €549.38 per tonne on Thursday, down by only €0.62 per tonne from €550.00 per tonne the previous day.
The index was down by €5.91 per tonne week on week and by €3.33 per tonne month on month.
In Northern Europe, offers of coil for November-December delivery were reported at €550-570 per tonne ex-works, with €540 per tonne ex-works said to be achievable for larger volumes.
For January-delivery coil, some suppliers voiced price ideas at €580-600 per tonne ex-works, but this was not considered workable in the spot market at the moment.
“European mills are not actively offering [HRC] for deliveries next year [2025] yet. The market is not strong enough to accept an increase,” a second buyer said. “Until the automotive industry improves, we will not see any positive change [in the price of HRC]. All car sales figures for September in the main countries [of Europe] are negative, so I don’t think anything will happen.”
Slow real demand from key end-user sectors, especially the automotive industry, was the major obstacle for a sustainable price rebound, market sources said.
“Automotive [original equipment manufacturers] have put pressure on [steel] mills to get extra discounts for [long-term contracts] for next year,” a third market source said. “Some [steel service centers] have given in and reduced contract prices for this year already.”
Several market sources suggested that European mills might start to reduce steel output in November-December, in an attempt to balance demand and supply and in the hope to achieve higher prices in spot sales in the first quarter of 2025.
“European mills have produced enough [crude steel] to get free carbon credits for the next year. So reducing output in an oversupplied market would be a logical step,” a trading source in Germany said.
Meanwhile, in Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy at €546.25 per tonne on Thursday, down by €2.13 per tonne from €548.38 per tonne the previous day.
The Italian index was down by €5.63 per tonne week on week and by €6.25 per tonne month on month.
Suppliers in Italy were offering December/January-delivery HRC at €570-580 per tonne delivered, which would net back to €560-570 per tonne ex-works, with possible discounts of no more than €10 per tonne, Fastmarkets understands.
Buyers’ ideas of tradeable values were lower, however, at €540-560 per tonne delivered (€530-550 per tonne ex-works).
Market sources suggested that November lead times were still available from some suppliers.
“[HRC] sales are slow. Lack of imports helps, but with no real demand there is no chance to increase prices,” a buyer in Italy said.
Meanwhile, the market for imported HRC was also quiet, with offer prices far above the level that European buyers would prefer to pay, market sources said.
Notably, November-shipment HRC from Turkey was offered at €580-590 per tonne CFR to Italy, including anti-dumping duty.
From Asia, offers were reported at €550-570 per tonne CFR to Italy.
“Import [HRC] offers are not workable [because they are] too close to domestic prices [in Italy],” a trading source in the country said. “Besides, most buyers are afraid of provisional anti-dumping duties against certain origins to be made by the EU in December.” These were expected to affect materials from India, Vietnam, Japan and Egypt.
Green Steel
Demand for green steel across Europe remained limited, due to significantly high premiums for such materials, and a lack of the regulation in the industry that would stimulate buyers to “go green,” market sources said.
European flat steel suppliers continued to offer steel with Scope 1, Scope 2 and upstream Scope 3 emissions below 0.8 tonnes of carbon dioxide (CO2) per tonne of steel at a premium of €200-350 per tonne.
Market sources said that such prices could be achieved in long-term contracts.
Achievable prices for similar material in the spot market were reported by buyer sources at a premium of €50-100 per tonne during the assessment week.
Market sources reported a bid for 20 tonnes of HR flat steel, carbon neutral for Scope 1 and 2 emissions, at €70 per tonne. A supplier source said that its price idea for such an order would be no lower than €100 per tonne.
As a result, Fastmarkets’ weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe was €100-200 per tonne on Thursday, unchanged week on week.
Published by: Julia Bolotova
