European steelmakers to accept lower HRC prices to fill gaps in June-July order books

European hot-rolled coil producers decreased offers and were ready to give additional discounts to fill order books for June-July, sources said May 27.

S&P Global Commodity Insights assessed Platts HRC in Northern Europe at Eur1,000/mt ex-works Ruhr, down by Eur40 on day.

Four sources estimated achievable prices at Eur1,000/mt ex-works Ruhr and one source said that prices of Eur950-1,000/mt ex-works were attainable. Deals are expected to be done soon at about Eur950/mt ex-works Ruhr. Official offers have been heard at Eur1,000-1,050/mt ex-works.

“The buyers are aiming to get Eur950/mt ex-works from Northern European mills, and I think they will succeed,” a Northern European distributor said.

Central European steelmakers have been offering and trading HRC to Germany at Eur950/mt delivered in the end of the week, this compared with Eur970-980/mt ex-works offered in the beginning of the week.

Low demand from end consumers, including the automotive industry, high stocks of the Northern European distributors and competitive offers from Central European steelmakers contributed to the downward mood in the market.

“It is really hard now for integrated mills, even EAF-based, they have to produce and they need to make certain amount of steel in June-July. So now they have to chase buyers to sell those volumes at almost any price,” a reroller said.

“Some mills are disparate, they call buyers almost bagging buyers to make deals. They need to sell, particularly June-July delivery material, they have gaps in order books they need to fill and the price is not the main issue for them now,” a trader said.

Activity in the north of Europe remained muted in the week to May 27 partially due to national holidays in the second half of the week. In Italy, in the meantime, demand was reported to slightly recover. Although Italian mills face same challenges as their northern European peers.

As a result, hot-rolled coil in South Europe was assessed down Eur20/mt on day at Eur950/mt ex-works Italy, according to S&P Global Commodity Insights data.

A deal and achievable prices have been heard at Eur950/mt ex-works Italy. Mills have been offering HRC at Eur960-980/mt ex-works Italy, but some customers have also received offers of Eur930-940/mt ex-works. Domestic prices are likely to reach Eur900/mt ex-works Italy, source said.

Overseas suppliers of HRC have been largely inactive in the European market, removing some downward pressure from domestic prices. The exporters are expected to return to the market with higher offers after India set 15% export duty on HRC.

The positive effect, however, might be short-lived as Indian mills reply on export markets and after the introduction of export duties domestic prices in India have dropped.

“Cheap imports of Eur850/mt CIF Italy are gone now after India set export duties, other suppliers are also trying to review the prices upwards,” an Italian trader said. “But it seems that the absence of import might be short-lived as India cannot survive without export. Domestic prices in India have dropped after the export duty was announced. Domestic market there cannot absorb all the volumes produced by Indian mills. So with decreasing domestic prices and need to sell India will return with competitive prices soon.”

The only import HRC offers heard on May 27 was Eur870/mt CFR Italian ports ex-Turkey, the price included anti-dumping duties.

— Maria Tanatar, Benjamin Steven