Market participants confirmed deals at lower prices in the North European hot-rolled coil market Aug. 9 alongside growing uncertainty about September consumption.
Platts assessed HRC in Northwest Europe down Eur10/mt on the day at Eur780/mt ex-works Ruhr, according to S&P Global Commodity Insights data.
Distribution sources cited deals between Eur750-Eur800/mt ex-works Ruhr, with the price level equivalent to deals done at Eur800/mt delivered North Europe. Lower prices were available to buyers further afield, with the lowest deals equivalent to Eur750/mt ex-works.
Uncertainty was prevalent in the market following a period of relative stability due to concerns over September price levels and wider market activity.
Mills and buyers were awaiting clarity about September consumption before making moves in the market. Buyers were ready to restock some products and even willing to accept a price increase if there was some assurance that purchased material would not devalue like coil bought in the wake of Russia’s invasion of Ukraine.
“Buyers have no clear outlook on the market for September, which isn’t helping sales,” said a service center source. “Mills chasing volumes and cutting the prices also contributes.”
HRC prices have plummeted from a peak of Eur1460/mt ex-works Ruhr March 21. That coupled with low demand from end-users in recent months has resulted in strong devaluation of stock bought in panic following Russia’s invasion of Ukraine in February.
Meanwhile, mills were also waiting for September before setting new offers, with sources contemplating whether pricing mechanisms, such as surcharges, could be introduced to deal with rising transportation and production costs.
Energy concerns remain paramount, though dependence on Rhine River water levels was also a costs factor, with transports only able to accommodate 30% of usual volumes. A service center source previously cited shipping costs at Eur100/mt, up from the usual Eur20/mt level.
Price direction in the Northern market is tied to real consumption levels and the subsequent need for traditional restocking efforts, sources said. If consumption improves, prices may move alongside, but if it remains poor further downtrend could be seen through September-October.
The market in Italy was quiet due to summer holidays and ongoing producer shutdowns.
Market sources said the tradable value was in a Eur770-Eur790/mt ex-works range.
HRC in South Europe was assessed stable on the day at Eur770/mt ex-works Italy.
— Benjamin Steven, Maria Tanatar