Oversupply edges EU hot-rolled coil prices lower

Deals in the European hot-rolled coil market were heard at lower levels June 21, although buyers continued to refrain from any substantial restocking.

Platts assessed hot-rolled coil in Northern Europe down Eur5 at Eur870/mt ex-works Ruhr June 21.

Deals were heard at Eur870/mt ex-works Ruhr and Eur880/mt ex-works Ruhr, while Central European material was available at Eur840-860/mt delivered Ruhr ex-Central Europe.

Several producers reported that a Benelux-based re-roller had been offering HRC at Eur820/mt ex-works Northern Europe, and one source indicated that realistic delivery costs could reach Eur80-85/mt, but other indications on delivery costs were heard much lower at Eur30-40/mt.

A source said that such deals were possible in the current market for some customers in special trades, but that they had not seen the offers. The source did not see the level as representative of the market price, with most offers sitting higher at Eur870-880/mt ex-works Northern Europe.

“We could offer at Eur820/mt against costs, but it doesn’t make sense to drag prices down,” the mill source said. “Current buyer sentiment is to wait and offers wouldn’t materialize as deals even if we did go that low.”

A trader in Benelux also denied the offers, agreeing with other buyer sources that current price levels should be in the Eur850-900/mt range, ex-works Ruhr.

Another mill source agreed that transactions would remain scarce.

“There’s no trade when the market is at these top or bottom levels, at peak prices buyers stay away, and mills won’t sell at the pricing floor,” the second mill source said.

Mills were heard able to offer July rolling, with near-empty orderbooks extending into August and September. Demand remained at minimal levels on poor end-user consumption and buyer risk aversion to restocking on pricing downtrends.

Producers were reported running at substantially reduced capacities, in line with ArcelorMittal’s recent announcement to idle their 1.5 million mt/year blast furnace in Dunkirk, France, as well as another furnace in Eisenhuttenstadt, Germany.

Market sources expected further closures were necessary in order to bring supply in line with currently reduced demand, as reduced capacities would not suffice to put an end to the recent pricing freefall.

In the Southern market, HRC was also down on the day, assessed at Eur810/mt ex-works Italy.

— Benjamin Steven, Maria Tanatar