HRC prices inch lower in Europe; rock bottom not yet reached: sources

The European hot-rolled coil market remained dull on Tuesday March 5 despite falling prices, with buyers claiming that rock bottom is yet to be reached, sources told Fastmarkets.

Trading has been sluggish across Europe for the past few weeks, with buyers abstaining from restocking in a declining market, Fastmarkets understands.

“Buyers are waiting for [HRC] prices to drop more and therefore do not go after orders now,” a mill source said.

To secure orders, European mills have cut offers for April-May delivery HRC to around €720-750 ($781-814) per tonne ex-works, compared with the target range of €780-820 per tonne ex-works in January, market sources said.

But this cut in offers has not resulted in better buying, Fastmarkets understands.

Buyers estimated achievable levels at €700-730 per tonne ex-works on Tuesday, but “there were very few tonnages actually being traded at these prices,” a buyer source told Fastmarkets.

“Trading is very slow. I think we will see limited restocking in early April at best,” a distributor said.

Sources suggested that producers might consider reducing output to balance supply and demand, but mills have made no official announcements yet.

As a result, Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €714.25 per tonne on Tuesday, down by €0.75 per tonne from €715.00 per tonne on Monday March 4.

The index was down by €4.71 per tonne week on week and by €45.75 per tonne month on month.

Meanwhile in Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy was calculated at €692.97 per tonne on Monday, down by €1.03 per tonne from €694.00 per tonne on the previous day.

The index was down by €22.03 per tonne week on week and by €59.53 per tonne month on month.

HRC offers in Italy were mainly heard at €700 per tonne delivered, equivalent to about €685-690 per tonne ex-works.

“Even though we expected [HRC] prices to hold at €700 [per tonne ex-works], this line has been crossed, yet demand didn’t improve [after the price drop]. Demand is the main problem,” a distributor in Italy said.

Tradable prices for HRC in Italy were in the range of €680-700 per tonne ex-works, market sources said.

Offers were also sliding further in the import market, but European buyers were cautious with overseas bookings due to long lead times (June-July delivery) in a highly volatile market.

Import offers from Vietnam and Taiwan to Italy were heard at €610-620 per tonne CFR.

Similar offer prices were heard from India and Egypt.

Turkey-origin HRC was reported to be the most expensive, with offers at €670 per tonne CFR, including the anti-dumping duty.

Most overseas suppliers were heard offering May-shipment cargoes.

Published by: Julia Bolotova