Negative sentiment persisted in the European hot-rolled coil market on Sept. 20 while trading activity remained minimal and mills failed to transfer surging energy costs onto steel prices.
Platts assessed hot-rolled coil in Northwest Europe at Eur740/mt ex-works Ruhr on Sept. 20, unchanged day on day.
The lowest HRC prices in the region have been heard in Germany at Eur720-750/mt ex-works Ruhr.
“Germany accumulated most of the coil stock in the European market and when it comes to the commodity coil, distributors struggle to move stocks down,” a German distributor said.
Prices in other regions of Northern Europe have been reported between Eur740-800/mt ex-works.
Surging energy costs have had limited impact on HRC produced by steelmakers operating blast furnaces, but the cost of downstream coil production has sharply risen, reaching around Eur200/mt for HRC transformation into CRC. The cost was even higher for coated flat steel. As a result, some mills preferred to focus on HRC sales. This partially offset the positive impact from the production cuts introduced by European mills.
In addition, rising energy prices hit service centers and forced them to operate at reduced rates and therefore, consume less steel, market sources said.
“The market is very calm, nobody is interested in making deals now as distributors are sitting on high volumes of material they need to get rid of by the year end,” a service center said.
Demand from end-consumers has also been below usual for this time of the year, according to market sources.
“There is some activity in end-consumers, but to be honest, it is far from normal, and it would not solve a problem of high stocks this year,” a German source said.
Platts assessed hot-rolled coil in the south of Europe at Eur760/mt ex-works Italy Sept. 20, up by Eur5/mt day on day.
No deals have been reported. Tradable values have been heard at Eur750-770/mt ex-works Italy.
Italian steelmaker Arvedi planned to stop production at its Cremona plant this week due to high energy costs and weak demand.
Platts is part of S&P Global Commodity Insights.
— Maria Tanatar