HRC prices tick up in Europe, but still below target offers

European hot-rolled coil prices were stable to slightly higher on Wednesday January 17, with limited supplies supporting bullish sentiment, sources told Fastmarkets.

European steelmakers kept their target offers prices for HRC at €800 ($871) per tonne ex-works for second-quarter delivery coil, but those levels have yet to be sealed in deals, Fastmarkets understands.

A mill source did report a transaction in the Benelux region at €760 per tonne ex-works, meanwhile, and buyers in Germany estimated the tradable value at €720-750 per tonne ex-works, with deals for small tonnages reported at €740 per tonne ex-works on Wednesday.

Despite slow end-user demand, which is considered by buyers to be a major obstacle to price hikes, European mills remained bullish because of their strong order books.

Buyers were cautious about bookings, however, buying mainly small volumes of coil to cover urgent needs.

“There is no booming activity in the market, but buyers do not have many options to choose from. Of course, €800 per tonne is elevated, but the move [to increase offer prices] is helping the mills achieve their previous goals,” a buyer in the Benelux area said.

As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €735.63 ($801.37) per tonne on January 17, up by €5.00 per tonne compared with €730.63 per tonne on Tuesday.

The index was up by €6.88 per tonne week on week and by €44.75 per tonne month on month.

In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €730.00 per tonne on January 17, up by €8.33 per tonne from €721.67 per tonne on Tuesday January 16.

The index was up by €15.00 per tonne week on week and by €50.83 per tonne month on month.

One integrated mill in Italy was heard offering March delivery HRC at €760-770 per tonne delivered (€745-755 per tonne ex-works).

Transactions for limited tonnages of HRC were reported at €750 per tonne delivered (€735 per tonne ex-works) on Wednesday.

Buyers estimated the tradable level at €740-750 per tonne delivered (€725-735 per tonne ex-works), with the lower end of the range viable for larger volumes.

Sources, however, pointed out, that buyers were booking only “minimal tonnages – not a single tonne above their needs.”

“It is a question, how long a supply-driven increase will last. The demand is still not there, so buyers are not stockpiling,” a second buyer said. “On the contrary, everyone is focused on pushing down their stock levels.”

In the secondary market, 4 mm hot-rolled sheet was traded at around €820-830 per tonne CPT at its highest level, compared with €800 per tonne CPT last week.

Import offers to Italy were largely flat day on day, meanwhile, with HRC for late-March shipment from Taiwan, Japan and South Korea on offer at €655-670 per tonne CFR to Italy.

The lowest offers were from Taiwan, source said, but this origin was falling under the “other” safeguard quota category, which is deemed as facing “the highest risk of paying the anti-dumping duty,” sources said.

Several sources reported that Turkey-origin coil with March shipment was on offer to Italy at €730 per tonne CFR, including the anti-dumping duty, although a buyer told Fastmarkets this was “too close to the domestic price to be workable.”

Published by: Julia Bolotova