HRC prices trend down across Europe; prices range wide on sluggish trading, bleak outlook

Hot-rolled coil (HRC) prices across Europe sank on Wednesday October 12 when lower offers emerged, and buying activity remained weak amid destocking activity and sluggish demand from end users, sources told Fastmarkets on October 12.
The European HRC market has remained depressed in October, with little trading taking place in oversupplied conditions and amid slow demand from key end sectors.

Some producers in Northern Europe have reduced their offers for large buyers to fill gaps in order books, according to several market sources. Notably, offers from Germany and the Benelux area to Italy were reported at €700-710 per tonne cpt, which nets back to €650-660 per tonne exw, sources said.

At the same time, some other mills in the region were maintaining offers at around €720-740 per tonne exw.

“The range [of HRC offers] in the market is enormously wide – it is hard to tell what the benchmark price [for HRC] is,” a mill source in Germany told Fastmarkets.

“All offers [for HRC] below €700 [per tonne exw] must be for really substantial quantities – they only appeared in the market this week,” a trading source in Germany said.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €701.25 ($680.94) per tonne on Wednesday, down by €17.50 per tonne from €718.75 per tonne on Tuesday.

The latest calculation of the index was down by €38.75 per tonne week on week and by €67.08 per tonne month on month.

The index was based on buyers’ indications of an achievable price of €700-740 per tonne exw and offers reported at €650-660 per tonne exw and at €725 per tonne exw.

Sources are not ruling out further price drops during October-November unless more production cuts are announced.

Notably, one tubemaker suggested that during restocking in November deal prices for HRC could slide to €600 per tonne exw. But a producer claimed that, “with such a low price, at most, two to three steel mills will remain operational by the beginning of 2023.”

Fastmarkets’ calculation of its daily steel HRC index domestic, exw Italy was €707.50 per tonne on Wednesday, down by €7.50 per tonne from €715.00 per tonne on Tuesday.

The latest calculation of the Italian index was down by €36.96 per tonne week on week and by €55.00 per tonne month on month.

Offers from local steelmakers were reported at €720 per tonne exw. Bids for large quantities from tubemakers, stockholders and steel service centers were lower, at €680-700 per tonne exw, sources said.

Small tonnages of HRC were still traded at €720 per tonne exw, while transactions for hot-rolled sheets were reported at €760-780 per tonne exw.

Imports
Overseas HRC offers consolidated below €700 per tonne cfr, but European buyers were cautious about overseas bookings given long lead times and the downtrend in the domestic market.

“I’m not interested in import [HRC] bookings – their prices are too close to the domestic, lead times are quite long, and the European prices [for HRC] are dropping. So importing is too risky,” a tubemaker from Italy told Fastmarkets.

“I’m not booking anything with long lead times now. The market is too unpredictable,” a source at a service center in in Italy said.

HRC from Japan and Taiwan with early-first-quarter 2023 delivery was on offer at €670-680 per tonne cfr Italy, sources said. And HRC was on offer from an Indonesian mill at €650 per tonne cfr Italy, with bids at €625-630 per tonne cfr Italy.

Sources also reported a booking of 30,000 tonnes of HRC with end-of-fourth-quarter delivery from Egypt at €680 per tonne cfr done last week.

Published by: Julia Bolotova