HRC price declines slow down across Europe; buyers continue to postpone restocking

The European hot-rolled coil market remained quiet in the week to Thursday April 4, with minimal trading reported, but the pace of price declines slowed down, sources told Fastmarkets.

Buyers continued to avoid big purchases, only booking small tonnages of HRC for immediate needs, Fastmarkets heard.

Muted demand from end-user sectors and lack of clarity on future price direction were limiting activity in the spot market, sources said.

Producers had short order books, and some of them could still offer May-delivery HRC, Fastmarkets heard.

“Some mills are offering June delivery, but May delivery is still widely available,” a steel service center source in Germany said.

Offers from integrated mills in Northern Europe were heard at €660-685 ($713-740) per tonne ex-works on Thursday, but the high end of the range was not considered workable by buyers.

A booking of HRC from Central Europe to Germany was heard at €680 per tonne delivered in the week to Thursday.

Buyer sources estimated achievable HRC prices in Northern Europe at €650-660 per tonne ex-works.

“If you go to a mill and say you want to book 1,000 tonnes of HRC, the price can even be €650 [per tonne] delivered easily,” a buyer source said. “But we don’t see such volumes traded in the spot market — it’s 100-200 tonnes here and there; buyers can live hand-to-mouth with such end-user demand.”

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €660.21 per tonne on Thursday, down by €0.62 per tonne from €660.83 per tonne on Wednesday.

The index was down by €3.54 per tonne week on week and by €54.79 per tonne month on month.

The pace of price declines has slowed down in the past week, sources said, adding that rock bottom could be close.

“It looks like producers are preparing to cut output rather than keep cutting prices and lose money,” a trader in the Benelux area told Fastmarkets. “Nobody has made an official move yet, but I think we can expect some [announcements] in Dusseldorf [at the Tube and Wire trade fair].”

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €636.67 per tonne on Thursday, down by €4.16 per tonne from €640.83 per tonne on Wednesday.

The index was down by €8.33 per tonne week on week and by €57.33 per tonne month on month.

Quiet conditions prevailed in the Italian market, with no restocking heard.

“Stocks are sufficient, considering demand,” a buyer in Italy said.

HRC with five- to six-week lead times from one local supplier was heard offered at €650-660 per tonne delivered (€640-650 per tonne ex-works).

Buyers estimated achievable prices at €630-640 per tonne ex-works.

Some sources suggested that prices for HRC could bottom out at €620-630 per tonne delivered.

Offers for import coil were rare in the week to Thursday.

HRC offers from Vietnam to Southern Europe were reported around €570-580 per tonne CFR for June shipment.

HRC from one Turkish supplier was offered to Italy at €600 per tonne CFR, including anti-dumping duty, sources said.

No fresh bookings were reported.

Buyers wanted to see how many tonnes of HRC would be cleared by EU customs before making new purchases, Fastmarkets understands.

The EU’s “other countries” import quota for April-June was already filled just two days after the new quota period started, Fastmarkets reported.

India’s HRC quota for the second quarter was filling at a slower pace than expected, with around 20% of the 294,662-tonne allocation for the period filled on Wednesday. This was due to delays in deliveries amid the Suez Canal shipping crisis, sources said.

“Vessels [with HRC] have to go around the Cape of Good Hope, so there are delays,” a source in Italy said. “There is plenty of India-origin HRC en route to Europe.”

Published by: Julia Bolotova