HRC prices in Europe might be at ‘rock bottom,’ sources say

Steel hot-rolled coil prices in Europe have stabilized and may have reached “rock bottom,” sources told Fastmarkets on Thursday April 18.

Trading was still rather limited in the European HRC market, but producers were reluctant to reduce their prices further, citing high costs.

“Restocking is slow; buyers do not want to commit to big volumes because demand downstream is still bad,” a mill source told Fastmarkets.

“But trading activity is still a bit better than two weeks ago,” the mill source added.

“Demand remains quite limited from all major steel-using sectors, and it is not likely to rebound, so the stabilization of steel prices is the best-case scenario we can count on now,” a source at a steel-service center said.

Northern European mills were offering HRC with May-June lead times at €630-640 ($671-681) per tonne ex-works.

Deals were reported at €620-630 per tonne ex-works in Germany.

A Benelux-based re-roller was offering HRC with lead times of four to five weeks at €600 per tonne ex-works.

“The market is oversupplied, and output cuts needed to be done at least a month ago, so the market could see the effect on prices in the second quarter,” a buyer in Germany said.

So far, only Slovakia-based producer US Steel Kosice has confirmed a blast furnace stoppage, Fastmarkets reported on Tuesday.

As a result, Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €627.08 ($667.44) per tonne on Thursday, down by €3.34 per tonne from €630.42 per tonne the day before.

The index was down by €13.27 per tonne week on week and by €61.92 per tonne month on month.

Sources said that some mills have already started negotiations for the long-term contracts with end users for the second half of 2024, with target prices reported around €780 per tonne, compared with around €750-800 per tonne settled for the first half of 2024.

In Southern Europe, meanwhile, Fastmarkets’ daily steel HRC index, domestic, exw Italy, was calculated at €620.42 per tonne on Thursday, up by €0.42 per tonne from €620.00 per tonne on Wednesday.

The Italian index was down by €4.58 per tonne week on week and by €49.58 per tonne month on month.

Official offers for May-delivery HRC from one local supplier in Italy were reported at €640 per tonne delivered on Thursday, which is equivalent to €630 per tonne ex-works.

Buyers’ estimations of tradeable values were heard at €600-620 per tonne ex-works, but transactions were heard done at no lower than €620 per tonne ex-works so far.

In the secondary market, 4mm HR sheet was heard traded at prices no higher than €720-740 per tonne CPT. Several sources reported that some sellers were selling such material at €700 per tonne CPT, but it was not widely confirmed by the market.

Restocking was limited in Italy, but further price drops were seen as unlikely due to high costs of production.

Besides, import prices were firming up, which was also seen as a supportive factor.

Offers from Asia were heard at €590-600 per tonne CFR, for June-shipment HRC.

A sizable tonnage of Japan-origin coil had been transacted at €590 per tonne CFR earlier this week

Some Asian suppliers had withdrawn their HRC offers from the market by Thursday and were expected to come back with higher offers next week, sources said.

From Turkey, an offer was reported at $660 per tonne CFR without the anti-dumping duty, but the price was considered by buyers to be too high.

Published by: Julia Bolotova