HRC prices little changed in Europe amid ‘non-existent’ trading

European hot-rolled coil prices were little changed on Thursday March 14, with thin trading amid slow downstream demand and pessimistic expectations among buyers, sources told Fastmarkets.
Trading remained limited in the European HRC market on Thursday, despite prices having dropped substantially over the past few weeks.

“There is no pick-up in trading. Lowering prices failed to spur steel demand. Buyers just keep purchasing hand-to-mouth, expecting prices to drop more tomorrow,” a buyer in Germany said.

Buyers were not interested in replenishing stocks due to lower order intake from end users, Fastmarkets understands.

Besides, industry sources expected domestic HRC prices to keep sliding in the short term, with a downtrend in raw materials prices adding pressure to already weak finished steel markets.

“Mills are hungry for orders but at the same time not prepared to cut prices significantly,” a buyer source in Northern Europe said. “[End-user] demand is also very weak; therefore, most buyers don’t feel the need to restock.”

Sources pointed out that buyers were destocking, with tough competition in the secondary market among steel service centers, traders and stockists.

Northern European steelmakers were reportedly trying to keep offers at €700-730 ($766-798) per tonne ex-works, while buyers’ ideas of achievable prices were heard at €680-700 per tonne ex-works.

Mills in Northern Europe were heard offering April-May lead times.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €695.33 per tonne on Thursday, down by €0.92 per tonne from €696.25 per tonne on Wednesday.

The index was down by €12.80 per tonne week on week and by €50.67 per tonne month on month.

In Southern Europe, Fastmarkets’ corresponding steel hot-rolled coil index domestic, exw Italy was calculated at €673.75 per tonne on Thursday, down by €1.25 per tonne from €675.00 per tonne on Wednesday.

The index was down by €13.75 per tonne week on week and by €61.88 per tonne month on month.

In Italy, low tonnages of HRC were reported traded around €670 per tonne ex-works, with buyer estimates of achievable prices at €650-680 per tonne ex-works.

April-delivery HRC was still available from Italian suppliers, Fastmarkets understands.

Buyers said that the bottom for HRC prices in Italy has yet to be reached, so they were in no rush to make any bookings.

“There is still room for [HRC] price correction. The only efficient way to stop the downtrend would be output cuts, but European mills are not in a hurry to implement those,” a buyer in Italy said.

HRC offers for June-July arrival from Taiwan, Vietnam and Japan were heard at €580-600 per tonne CFR on Thursday.

But buying interest in import coil was also limited, despite prices being lower than domestic ones, Fastmarkets understands.

EU import safeguard risks were high, especially for the “other countries” category, where the cheapest offers come from — namely Vietnam, Japan and Taiwan — and lead times were quite long, sources said.

Buyers also expected import prices to sink even lower in the short term due to poor demand and sliding raw material costs, sources said.

Published by: Julia Bolotova