Northern European HRC producers cut prices to settle deals

Northern European steelmakers decreased hot-rolled coil prices on June 15 in an attempt to spur buying activity in slow market.

Platts assessed HRC in Northern Europe at Eur900/mt ex-works Ruhr, down Eur30 day on day, according to data from S&P Global Commodity Insights.

Few deals have been reported at Eur900/mt ex-works Ruhr. Market participants estimated achievable prices at Eur890-950/mt ex-works Ruhr, but the majority of the sources reported prices of Eur890-910/mt ex-works Ruhr.

The market had mixed outlooks on sentiment — some participants believed that the prices had moved close to bottom, while others claimed that, as demand was unlikely to see substantial recovery, prices would drop further.

“Market price is at bottom already, at Eur900ish/mt ex-works,” a producer said. “Steel mills need to be smarter this time and not drop prices further.”

Bids, however, had already been reported at Eur800-850/mt ex-works Ruhr.

“Buyers are in wait and see mode until prices reach bottom,” a German distributor said. “And there is no rule that the bottom should be at the price at which mills still would get margins.”

Although demand remained low, more buyers have been showing more interest in making deals to restock. The demand revival, however, was unlikely to be strong enough to support domestic HRC prices.

“Demand expected to revive in July, buy predicted restocking constantly delayed, hard to make predictions in wait and see market when prices in freefall and demand so low,” a Northern European trader said.

Volumes consumed by the automotive industry – a key end user for coil – were expected to be substantially below normal volumes in 2022 due to components shortages putting strains on car manufacturing.

Steelmakers aimed to finalize negotiations with carmakers for the third-quarter and the second-half 2022 contracts by the end of June.

Lower import prices have also been contributing to the bearish sentiment in the market.

Offers of HRC from Taiwan have been heard at Eur850/mt CFR Antwerp, down by Eur20-30 compared with offers from the end of the prior week.

Hot-rolled coil in Southern Europe was assessed at Eur850/mt ex-works Italy June 15, unchanged day on day.

The latest deals and achievable prices have been heard at Eur850/mt ex-works, but bids have been reported around Eur800/mt ex-works.

The next round of deals was expected to be settled at lower prices, as producers need to fill July order books, market sources said.

Import offers have been heard at Eur770-790/mt CFR Italy from Asia and Turkey, including anti-dumping duties. However, bids were reported at Eur750/mt CFR Italian ports.

— Maria Tanatar, Benjamin Steven