HRC prices largely unchanged in Europe; mills hope for stronger rebound in Q1

European prices for steel hot-rolled coil remained broadly stable on Tuesday October 22 amid limited activity because mills were holding back on volumes for the first quarter of next year on the expectation that prices will rebound, sources have told Fastmarkets.
In Northern Europe, offers for November-December delivery coil were reported at €550-570 ($596-618) per tonne ex-works, with €540 per tonne ex-works said achievable for larger volumes.

“Order books are still not as full as mills wish, so for Q4 [2024] volumes they can still be flexible with price on a good tonnage,” a trading source in Germany said.

Sources reported some pick up of activity since the beginning of October amid “very limited restocking.”

“We got more inquiries last week [week ended October 18] and [are] selling more  [HRC]. [Demand] is not booming, but we’ve definitely recovered from the low,” a mill source in Northern Europe said.

Market sentiment was cautiously optimistic despite subdued end-user demand, and producers hoped to achieve higher prices for HRC with lead times in the first quarter due to expected restocking and limited availability of imports.

“Mills are not actively offering HRC for January-February delivery now; they certainly expect to achieve higher prices, but are still assessing the market, and so do buyers,” a stockholder in Germany said.

Sources suggested that European mills might cut output in November-December in an attempt to balance demand and supply.

“So far, European mills have produced enough [crude steel] to claim their carbon credits for the next year. It is very likely that they [European mills] will curb the output in the end of the further quarter 2024,” a second trader said.

As a result, Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €553.75 per tonne on Tuesday, up by €0.62 per tonne from €553.13 per tonne the previous day.

The index was down by €0.63 per tonne week on week and by €2.71 per tonne month on month.

For January-delivery coil, some suppliers voiced offers at €580-600 per tonne ex-works, which was not considered workable for the spot market so far.

Sources said that European mills were also trying to push spot prices higher ahead of negotiations of long-term contracts with end users for the next year.

“Mills are in the tricky position. The gap between the spot and contract market is too high, so automakers ask for up to €200 per tonne discount for the first half of 2025 contracts. That would be a disaster for the mills,” a buyer source in the Benelux area said.

Long-term contracts with original equipment manufacturers in the automotive industry for the second half of 2024 were closed at €730-750 per tonne – and even at €700 per tonne in some cases – in contrast with €800 per tonne in the first half of the year.

Meanwhile, in Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €548.13 per tonne on Tuesday, down by €3.12 per tonne from €551.25 per tonne on the previous day.

The Italian index was down by €0.62 per tonne week on week and by €9.37 per tonne month on month.

In Italy, November-December delivery HRC from a local producer was on offer at €580 per tonne delivered, which would net back to €570 per tonne ex-works.

Sources, however, estimated tradeable values for small tonnages at no higher than at €560 per tonne delivered (€550 per tonne ex-works). For bigger lots it was still possible to get €540 per tonne delivered (€530 per tonne ex-works), several sources said.

Trading was also limited in Italy.

“Demand [for HRC] is still weak and stock levels are still high,” a stockholder in the nation said.

In the secondary market, cut-to-length HRC was still available at around €620-630 per tonne CPT, stable since mid-October.

Meanwhile, the market for imported HRC was largely quiet due to uncompetitive prices, and because of trade restrictions in place.

Notably, November-shipment HRC from Turkey was offered at €580-590 per tonne CFR to Italy, including the anti-dumping duty.

From Asia, offers were reported at €560-570 per tonne CFR to Italy.

“Imports are simply not workable – that’s one of the reasons behind European mills’ bullishness. In the first quarter 2025, a lack of import [HRC] will start to be visible in the market and European mills will have the upper hand in negotiations,” a buyer in Italy said.

Published by: Julia Bolotova