Offers for HRC rise in Europe, despite limited demand

Offer prices in the European hot-rolled coil market increased in the week to Friday December 15, despite a seasonal slowdown in trading, sources told Fastmarkets.

The leading European steelmaker increased its HRC offer price to €740 ($809.51) per tonne ex-works, up from the previous offer of €720 per tonne ex-works in the first half of November, sources said, with available lead times extending to February or March, depending on the region.

Buyers told Fastmarkets the new offer price was unworkable, however, due to a lack of demand from end users.

Tradable values were estimated by buyers at €680-700 per tonne ex-works on a Friday.

“It is a standard tactic by the European mills, to increase offers ahead of the Christmas break,” a trading source in Germany told Fastmarkets.

Some sources said the reasoning behind the increases was that mill had experienced some success in long-term contract negotiations with original equipment manufacturers (OEMs) in the automotive sector this week.

“Some progress was made in negotiations with automotive OEMs,” a trading source said, “and  this week we heard contracts sealed at around €750 per tonne for [the first half of] 2024.”

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €690.88 per tonne on December 15, marginally up by €0.05 per tonne from €690.83 per tonne on December 14.

The index was up by €5.46 per tonne week on week and by €36.75 per tonne month on month.

Most market participants said that some price rises could probably be achieved after the festive break, despite limited end-user demand, but only in cases where there are reduced supplies at the European mills.

In addition to the restarts recently announced by Liberty, sources said they also expect blast furnace (BF) “A” at Salzgitter and BF No6 at Tata Steel Ijmuiden to restart operations in the first quarter of 2024.

The corresponding daily steel HRC index domestic, exw Italy was calculated at €679.17 per tonne on Friday, up by €2.84 per tonne from €676.33 per tonne on Thursday.

The index was up by €13.75 per tonne week on week and by €46.67 per tonne month on month.

Italian producers were maintaining their offers for February delivery HRC at €720 per tonne delivered (€705 per tonne ex-works), although no trades were reported at that level.

Sources said that some Italian suppliers could step back to €705-710 per tonne delivered (€690-695 per tonne ex-works), but most mills remained unwilling to drop their prices below €700 per tonne delivered.

A leading European mill offered HRC to Italy at €720-740 per tonne delivered, depending on the tonnage.

But Italian buyers estimated the achievable price for HRC at €670-690 per tonne ex-works on Friday.

Import offers to the EU were limited in the week to December 15, with the lowest offers reported from Vietnam at €640-645 per tonne CFR to Italy for February delivery.

The highest offers were from Turkey at €680-690 per tonne cfr, including anti-dumping duties.

Japanese mills, meanwhile, are not expected to come back with new offers until January, sources said.

Published by: Julia Bolotova