The hot rolled coil market in southern Europe is currently experiencing significant stagnation. Overall order levels in both Europe’s import and domestic HRC markets are notably subdued.
“Steel consumption has decreased by approximately 20% this year, with certain end-user sectors experiencing more significant declines than others, particularly agriculture and automotive,” a service centre in Italy tells Kallanish. Coil derivatives, including tube and sheet, are going through a substantial drop in sales accompanied by decreasing prices.
European mills are seeing an overall decrease in orders and are operating with reduced lead times. “The complete value chain is experiencing a crisis and facing margin pressure. The current prices and market dynamics are no longer sustainable,” notes another coil buyer in Italy.
Import prices for HRC from Asia into Italy have significantly decreased since August, and there is a lack of purchasing interest. Asian suppliers are offering at €530-550/tonne ($589-611) cfr in Italy, but European and Italian steelmakers have lowered their asking prices to match import offers, making local purchasing more alluring.
Inventory levels in Italy remain relatively high, suggesting no immediate necessity for HRC procurement. Most buyers are going to wait and watch rather than make a purchase.
Countries that have exhausted their EU quotas have been replaced by alternative suppliers like Turkey, which has provided competitive offers. Currently, prices for service centre quality HRC in Italy are at approximately €550/t base delivered, or around €530/t base ex-works.
Market participants expect further price reductions in the upcoming weeks. In July, prior to the August summer break in several EU countries, HRC prices in Europe were reported at €615-620/t base ex-works.
Natalia Capra France
