Prices stable in European HRC market amid continued inactivity

Prices in the Northern European hot-rolled coil market remained stable on Friday January 6, reflecting a lack of activity after the Christmas and New Year holidays.
While some sources expect market conditions to improve in the coming year, others remain pessimistic about any significant pick-up in demand from the automotive sector, the key end-use sector for HRC.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €669.17 ($707.73) per tonne on Friday, unchanged from the previous day.

Rising contract prices and lengthening delivery times have added weight to the argument that prices will rise in the spot market, some sources suggested. Production cuts that have been in place since 2021 could also bolster prices over in the coming months, they said.

These indications of improved market conditions have resulted in mills targeting higher contract prices. With significant tonnages previously booked and deals with large customers still involved in contract talks, mills remain unlikely to drop prices to fill gaps in order books.

While sentiment appears to be recovering, uncertainty remains about whether demand will significantly improve over the coming year.

Contracts have been fixed based on price but not tonnage, meaning that mills may struggle to fill order books if customers only book minimum quantities, sources said.

Slow consumption in the automotive sector could pressure prices downward if mills are forced to lower prices to fill gaps in their order books.

A worsening recession that constrains demand in the automotive sector could in turn result in worsening market conditions over the coming year, one source indicated earlier this week.

Christmas holidays and Epiphany Saints Day resulted in no activity reported in the Italian HRC market on Friday.

As a result, Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was unchanged on Friday at €652.50 per tonne.

Published by: India-Inés Levy