Trading in the spot market across Europe remained subdued, with buyers wary of booking big volumes of HRC ahead of the summer holiday season in Europe and before steel mills settle their long-term contracts with end users, sources said.
In addition, new customs statistics will be available from July 1, with buyers keen to find out how many tonnes of HRC are likely to be customs cleared for the third quarter under the EU’s updated safeguard system, Fastmarkets understands.
Domestic HRC prices were still under pressure from slow demand, oversupply and fierce competition in downstream markets between independent and mill-owned steel service centers or distributors.
“This [competition between service centers and distributors] is a typical when [end-user] demand is sluggish and everyone is fighting for orders,” a mill source said.
European steelmakers have weak order books, sources said, and lead times were estimated at five to six weeks, leaving HRC offers from suppliers in Northern Europe largely unchanged at around €620-650 ($663-695) per tonne ex-works.
Buyer estimates of achievable prices were slightly lower at €620-630 per tonne ex-works.
Sources said that, for September delivery, mills planned increases of €20-30 per tonne, with official announcements likely at the end of July.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €629.88 per tonne on Friday, down by €0.12 per tonne from €630.00 per tonne on Thursday.
The index was also down by €0.12 per tonne week on week and by €6.62 per tonne month on month.
Despite slow sales, producers were unwilling to provide big discounts in the spot market.
“Negotiations with the automotive industry are now under way and mills hope to roll over prices [for second-half 2024 contracts], so they don’t want to show weakness in spot sales,” a buyer source in Germany said.
For the first half of 2024, contracts with original equipment manufacturers (OEMs) in the automotive industry have reportedly been signed at €750-800 per tonne for HRC.
Buyers have reportedly been seeking discounts of €100 per tonne for the second half of the year, while producers are aiming for a rollover, sources said.
Fastmarkets understands that negotiations are still under way, with one market participant reporting that “nothing has been finalized so far.”
In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €625.00 per tonne on Thursday, down by €0.42 per tonne from €625.42 per tonne on Thursday.
The index was down by €3.75 per tonne week on week and by €5.00 per tonne month on month.
The latest offers in southern Europe came from an integrated mlll in Italy €640-650 per tonne delivered (€630-640 per tonne ex-works), with a lead time of around five weeks.
But one supplier in the south withdrew from the market earlier this week, sources said, and was apparently mulling a price increase for September delivery HRC.
Bids were reported at €600-620 per tonne ex-works, but the lower end of the range was deemed unworkable by HRC suppliers, sources said.
The market for overseas coil was understandably quiet ahead of the new EU import quota period, sources told Fastmarkets.
“The chance that duties will have to be paid for HRC volumes bought under residual quota is almost 100%, [so] everyone just wants to see how many tonnes exactly will be customs cleared as of July 1, and what the situation is regarding ‘other origins’ [cargoes],” a buyer source in Italy said.