Northern European HRC prices stable, supported by production cuts; sentiment cautiously bullish

Domestic prices for hot-rolled coil in Northern Europe remained flat on July 15, supported by some demand revival and the effects from production cuts across Europe.

Platts assessed HRC in Northern Europe at Eur855/mt ex-works Ruhr July 15, stable day on day, according to S&P Global Commodity Insights data.

Deals for minor tonnages and achievable prices have been heard at Eur850-860/mt ex-works Ruhr. One Northern European mill was reported to increase offers for HRC to Eur900/mt ex-works.

The region’s steelmakers are expected to announce higher offers soon. One Northern Europe steelmaker has already reported increased offers for HRC to Eur900/mt ex-works, making it about a Eur50/mt rise compared to previous prices.

Some sources believe that transaction prices for coil will move up to that offer level in September, when more buyers return to the market looking for orders.

“I think we will see HRC prices rise to Eur900/mt Northern Europe in September,” a Northern European distributor said. “Stronger dollar makes import steel more expensive, so there is no competition now. And the mills face challenges related to high energy costs and possible disruption of gas supply.”

In the meantime, trading activity has been slowly recovering as more distributors have been looking for the material to restock, sources said. Some market participants believe that buyers have to restock by the end of July, otherwise they would struggle to get volumes in time for autumn due to the effects of longer maintenance stoppages by steelmakers and equipment stoppages. ArcelorMittal in France, HBIS Serbia, Acciaierie d’Italia and Arvedi, both in Italy, confirmed furnaces stoppages, and other producers were planning longer summer maintenances to reduce supply and support domestic prices.

“We see some stability in the market now, and this, combined with production cuts, will hopefully give prices an opportunity to recover,” a European trader said. “The demand is uneven, some buyers have stocks from floor to the roof and even stocking coil outside, but others have medium stocks, and they need to plan September restocking now not to face long lead times and high prices if they delay purchases.”

HRC in Southern Europe was assessed at Eur785/mt ex-works Italy July 15, up Eur5 day on day.

Deals for minor tonnages have been heard at Eur800/mt ex-works Italy. Official offers have been reported ta Eur800-820/mt ex-works Italy and buyers estimated tradable value as Eur750-800/mt ex-works Italy.

— Maria Tanatar, Benjamin Steven