No rebound in sight for European HRC amid end-user consumption concerns

Quiet conditions and slowing end-user consumption persisted in the European hot-rolled coil market, clouding the outlook for the fourth quarter of 2023, sources told Fastmarkets on Wednesday September 20.

In Northern Europe, trading was close to nil, with most buyers postponing restocking.

“We expect restocking to begin in October or even November, as demand by end users is slowing down. So why buy when clients need less material and at the same time prices are under pressure?” a distributor in the region said.

Most buyers indicated that tradeable prices for HRC in the region were €620-640 ($663-684) per tonne ex-works, while producer sources were sticking to €640-650 per tonne ex-works.

Sources pointed out that firm offers were rare, with mills offering on a “case-by-case” approach. Lead times were quite short, around five to six weeks, indicating thin order books.

The major concern for market participants remained slowing end-user demand, with no signs of recovery this year.

“[Steel service centers] also have short orderbooks and therefore thin purchasing activity,” another source said.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €634.88 per tonne on Wednesday, down by €0.12 per tonne from €635.00 per tonne the previous day.

The index was down by €7.20 per tonne week on week and by €1.37 per tonne month on month.

Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy, meanwhile, was €622.08 per tonne on Wednesday, down by €1.25 per tonne from €623.33 per tonne on the previous day.

The Italian index was down by €5.25 per tonne week on week and by €7.92 per tonne month on month.

Domestic mills in Italy continued to avoid giving firm offers in a slow market, also preferring to conduct business on a “case-by-case” basis.

Buyers’ idea of the tradeable price level for HRC in the country was no higher than €620-630 per tonne ex-works.

Actual trading, however, was very meager in the Italian market, similarly to Northern Europe.

“It is a very quiet September, very few transactions. Our sales to end users are lower year-on-year, and we are not sure prices have touched the bottom yet, so nobody’s buying [HRC],” a steel service center source in Italy said.

Imports offers of HRC to Europe were broadly flat on Wednesday compared with a day earlier, but interest in imported coil remained low due to long lead times, the small gap with domestic prices and high safeguard-related risks.

An offer from a Vietnamese mill to Italy was heard at $630 per tonne CFR for January arrival.

Offers from Taiwan for January-delivery HRC were heard at around €590-595 per tonne CFR to Italy.

And Japan-origin HRC was offered by a trader at €600-610 per tonne CFR to Italy for January-arrival.

Published by: Julia Bolotova