Low demand constrains domestic CRC, HDG price growth in Europe despite reduced supply

European prices for cold-rolled and hot-dipped galvanized steel coil were stable or slightly softer in the week to Wednesday April 12, despite continuing supply issues among domestic suppliers, sources have told Fastmarkets.
Market sources said that limited demand from the end-user side was the major obstacle to price growth, despite the acute supply tightness in the domestic market.

“Demand for downstream flat steel is weaker than expected. Prices are largely being supported by the Tata Steel situation, and end-users will not accept higher prices [for CRC and HDG],” the trading source said.

Tata Steel’s IJmuiden works in the Netherlands declared force majeure on CRC deliveries in late February.

In addition, some re-rollers in the Benelux area also have also had some technical problems, sources said.

Buyers said that the tradable level for CRC was €940-950 ($1,025-1,036) per tonne ex-works and that €970-980 per tonne ex-works was workable for HDG in Northern Europe.

A distributor made bookings at these prices for material from EU mills for June production, which would indicate delivery in July. But added: “Now, no new offers, no new demand.”

Other sources said that European mills had allocations for July-August deliveries of CRC and HDG, but firm offers were rare because most mills were still out of the market this week.

A booking of Italy-origin HDG to Germany was reported at €980 per tonne delivered during the assessment week, below the initial offer at €1,000 per tonne delivered, several trading sources said.

Sources expected more clarity on demand and the future price direction next week, when the market was expected to restart fully after the Easter holidays.

Fastmarkets’ weekly price assessment for steel CRC, domestic, exw Northern Europe, was €940-960 per tonne on Wednesday, down by €10 per tonne from €950-970 per tonne on April 5.

The corresponding weekly price assessment for steel HDG, domestic, exw Northern Europe, was €970-980 per tonne on Wednesday, also down by €10 per tonne, from €980-990 per tonne seven days earlier.

Imports
Market sources said that import offers have become more attractive for buyers in Europe recently due to a widening gap to domestic prices and long lead times from local mills.

“European mills are offering July-August [delivery] for CRC, and although Asian mills give similar lead times, [the price is] €100 per tonne lower,” a buyer in Italy said.

“Import offers [for CRC and HDG] are attractive and find buyers, but domestic sales are very limited,” a second trading source said.

During the assessment week, trading was quiet and the number of offers was limited due to holidays in Europe.

In the previous week, a booking of South Korea-origin HRC to Southern Europe had been heard at €820 per tonne CFR for June shipment.

A Japanese mill was offering CRC to Europe at $900-920 per tonne CFR Antwerp, also for June shipment.

And an offer of 0.5mm HDG with Z100 coating from Vietnam was reported a week earlier at $990 per tonne CFR to Southern Europe, with a booking reported at $980 per tonne CFR.

Published by: Julia Bolotova