HRC restocking in Europe continues to push up prices

European hot-rolled coil buyers partially accepted higher prices on Thursday November 2, Fastmarkets understands, with some producers claiming to have already sold out of fourth-quarter rolling material.

The sustainability of the uptrend remains to be seen, however, because end-user demand for steel remains poor across Europe.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €631.63 ($666.89) per tonne on November 1, up by €9.13 from €622.50 per tonne on Wednesday.

The index was up by €18.21 per tonne week on week and by €11.63 per tonne month on month.

Integrated steelmakers in the region were aiming to get €680 per tonne ex-works for January rolling coil.

“We have now closed sales for Q4, with lead times [going] into Q1 [2024],” a steel mill source told Fastmarkets.

Some steelmakers were reportedly still offering discounts for HRC, but only for  December delivery coil.

And transactions for fourth-quarter delivery HRC were heard reported at €620-640 per tonne ex-works in the region.

“We can offer some very limited volumes [of HRC] for December delivery, but those are vanishing because buyers are starting to come back to the market,” a second steelmaker source said.

But others said the improved demand was largely due to restocking activity rather than any improvement in end-user consumption.

“People are buying to cover their first-quarter needs. It has been almost two months without restocking,” a stockholder said.

In Southern Europe, Fastmarkets’ calculated its daily steel hot-rolled coil index domestic, exw Italy at €615 per tonne on November 2, up by €11.25 per tonne €603.75 on November 1.

The Italian index was up by €15 per tonne week on week, but down by €9.37 per tonne month on month.

Deals for December-delivery coil were reported at €600-620 per tonne ex-works in the region, while for January lead times, offers were closer to €650 per tonne delivered, which nets back to €635 per tonne ex-works.

One integrated mill in the region was reportedly targeting even higher prices – at around €680 per tonne ex-works. But market participants said the mill only had limited quantities of available HRC, due to being largely focused on sales of more high-margin products, such as galvanized coil.

In Italy, buyers were also restocking, which, along with lack of import offers, was supporting price increases there.

“Buyers want to secure tonnages for first-quarter delivery [and fear] further price spikes in January amid reduced supplies,” a local trader source told Fastmarkets.

Import offers were scarce in the week starting October 30, with overseas suppliers reportedly mulling higher prices.

Sources also told Fastmarkets that previous offers of HRC at €580 per tonne CFR from Asian mills were no longer available.

Published by: Julia Bolotova