Prices for steel hot-rolled coil in Europe were largely flat on Monday January 30 because buyers did not consider new offer prices to be sustainable, Fastmarkets has heard.
During the week to January 27, European flat steel producers pushed HRC offers upward to €780-800 ($848-869) per tonne for April deliveries. Good order books, limited availability and some restocking were the main factors behind the price rises, sources said.
“Stockholders and [steel service centers] reduced their inventories and were looking to restock in January,” a mill source told Fastmarkets.
Buyers, meanwhile, were holding back, resisting a new price rise, citing insufficient steel demand.
“This [HRC price increase] looks like a price bubble because it is not supported by a recovery in demand,” a trading source in Germany said.
“I don’t think that those prices will be accepted in the next 1-2 months,” another source in Northern Europe said. “I think those prices are not sustainable in the current market.”
One buyer source said that tradeable values for HRC in Northern Europe were around €730-750 per tonne ex-works.
Notably, buyers were worried about EU mills bringing idled capacities back into operation, pointing out that recent price increases achieved in HRC transactions, compared with the fourth quarter of 2022, have come mainly thanks to the more balanced market, itself a consequence of numerous earlier output cuts.
This month, SSAB and US Steel Kosice have restarted blast furnaces, while ArcelorMittal was considering the possibility of such a restart in Spain.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €755.42 ($820.87) per tonne on Monday, up by €1.67 per tonne from €753.75 per tonne on Friday.
The latest calculation of the index was up by €2.92 per tonne week on week, and by €86.67 per tonne month on month.
In Southern Europe, Fastmarkets’ calculation of the corresponding daily steel HRC index, domestic, exw Italy, was €751.25 per tonne on Monday, up by €0.83 per tonne from €750.42 per tonne on Friday.
The latest calculation of the index was up by €12.80 per tonne week on week and by €98.75 per tonne month on month.
Offers of April-delivery HRC from mills in the region were heard at €780 per tonne delivered, equivalent to around €760-765 per tonne ex-works.
Similarly to Northern Europe, Italian producers raised their offers during the week to January 27.
Buyers’ indications of tradable prices were still at €730-750 per tonne ex-works, sources told Fastmarkets.
Import offers from Asia were reported on Monday at €710-715 per tonne CFR.
Published by: Julia Bolotova