HRC market in Europe questions post-holiday price direction

The European market for steel hot-rolled coil was quiet on Friday August 25, with buyers digesting recent price rises and waiting for more producers to come back to the market with new offers, industry sources told Fastmarkets.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €643.75 ($697.81) per tonne on Friday, stable day on day.

The index was up by €7.50 per tonne week on week but down by €13.13 per tonne month on month.

Few suppliers were active in the market due to summer holiday absences, but earlier this week a leading European steelmaker increased its offer prices to €700 per tonne ex-works for October-delivery HRC.

Sources expected other major mills in Europe to increase their offers to similar levels shortly. But some German suppliers were still offering coil with October lead times at €640-650 per tonne ex-works in the week to Friday.

No transactions have been reported at €700 per tonne ex-works so far, and most buyers considered that price “not workable,” claiming that they could not increase prices in the secondary market.

“Demand [for HRC] remains very weak,” a distributor said. “And the September rebound that mills hope for seems to be unlikely. Only the automotive industry is performing more or less steadily [while] other end-user [steel] sectors are in decline.”

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy was €635.00 per tonne on Friday, up by €1.67 per tonne from €633.33 per tonne the previous day.

The Italy index was up by €5.00 per tonne week on week, but down by €5.00 per tonne month on month.

Italian market sources estimated tradeable values for September-October rolling HRC around €630-640 per tonne ex-works. But no official offers have been announced by local mills yet due to summer maintenance closures.

Before the stoppages, target prices heard from Italian integrated mills were around €700 per tonne ex-works.

Buyers, however, suggested that achieving such prices would not be possible in the near term, given the slow consumption and the availability of cheaper imports.

“Starting in October, the European market will be flooded by imported coil booked at rather competitive prices,” a trading source in Italy said.

Fresh overseas coil offers were coming mainly from India and Turkey for November-December delivery, at prices that were quite high and therefore uncompetitive — around €630-640 per tonne CFR.

Published by: Julia Bolotova