HRC market more positive in Italy, quiet in Northern Europe

Steel hot-rolled coil prices were broadly stable in Northern Europe on Tuesday May 7, with those in Italy ticking up on improved buying, but the sustainability of the uptrend is being questioned by buyers amid insufficient support from consuming industries, sources told Fastmarkets.

In Italy, a local steelmaker was maintaining its offers at €670 ($722) per tonne delivered (€660 per tonne ex-works). Additionally, several sources said that the mill was planning to raise their prices to €690 per tonne delivered during May on improved buying and cost factors.

But other sources suggested that the talk of a price rise was “speculation, aimed at stimulating bookings.”

These sources added that transaction prices were still lagging offers, with tradeable values heard at €640-650 per tonne delivered (€630-640 per tonne ex-works) for June-delivery HRC.

As a result, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €638.75 per tonne on May 7, up by €5 per tonne from the previous calculation of €633.75 per tonne on May 3.

Fastmarkets’ European HRC indices were not published on May 6 because of the Early May Bank Holiday in the UK.

The index was up by €11.50 per tonne week on week and up by €2.92 per tonne month on month.

Supply in the nation was reduced, with only one local mill currently being active with HRC production.

Apparent buying has picked up in Italy since late April, but with a “cautious attitude,” sources told Fastmarkets.

“Buyers avoid stockpiling [and] there is no clarity on whether it is a sustainable price rebound,” a trading source said.

Import prices for HRC have also been firming lately, with offers for Asia-origin coil ranging from €600 per tonne CFR up to €620 per tonne CFR. Vietnam remained the cheapest origin, sources said.

A reduced gap with domestic prices and long lead times (July-August) were limiting buying interest for imported coil.

Meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €640.83 per tonne on May 7, down marginally by €0.42 per tonne from €641.25 per tonne on May 3.

The index was up by €8.83 per tonne week on week but down by €16.25 per tonne month on month.

Offers from integrated mills in the region were reported at €640-660 per tonne ex-works on May 7, with lead times reported at around 4-5 weeks.

Tradeable values were heard at €630-640 per tonne ex-works.

Market sources reported improved trading in the spot market in late-April to early May due to some restocking.

At the same time, most sources were skeptical about the possibility of a significant price rebound, because real demand has remained quite limited.

“Real demand is still quite slow, and we are heading into the summer lull, so I wouldn’t expect a strong improvement in the short run,” a trader in Northern Europe said.

Industry sources remained confident that output cuts could help sustain the uptrend and balance the market, but so far, only one steelmaker in Central Europe has confirmed an extended blast furnace stoppage, Fastmarkets reported.

HRC offers from Taiwan and Japan to Antwerp were reported at €620-630 per tonne CFR on May 7.

Published by: Julia Bolotova