Producer push for higher HRC prices in Europe hindered by lack of demand

Hot-rolled coil prices across Europe continued trending higher on Wednesday November 9, but buyers remain unconvinced, with only limited signs of any real improvement in consumption, sources told Fastmarkets.

Buying activity in Europe has picked up, however, with some restocking taking place to secure tonnages for first-quarter deliveries in 2024.

The fact that supplies have also been reduced by the production cuts at some steelmakers was also supporting the price rises, sources said.

And lead times at integrated steelmakers have reportedly extended to a minimum of six weeks – up from four-to-six weeks previously.

Most buyers put the workable level at about €640-660 ($684-706) per tonne ex-works, with some transactions in Germany reported within that range on November 9.

Offers from integrated steelmakers were reported at €680-700 per tonne ex-works for January rolling coil, while some mills are considering adding €20-30 per tonne to their offer prices for February.

But some market participants are concerned that the bullish trend will not be sustainable into the first quarter of 2024, because end-user demand is expected to remain low. At the same time, some mills are considering blast-furnace restarts, so HRC availability will increase.

“Salzgitter [is mulling a restart of] its BF A in Q1 2024, and ArcelorMittal’s Bremen BF is expected to come back online in Q4 2023,” a trader source told Fastmarkets.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €650.60 ($695.48) per tonne on November 9, up by €5.47 per tonne from €645.13 per tonne on November 8.

The index was up by €18.97 per tonne week on week and by €30.60 per tonne month on month.

In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €627.92 per tonne on November 9, up by €6.46 per tonne from €621.46 per tonne on November 8.

The Italian index was also up by €12.92 per tonne week on week and up by €22.92 per tonne month on month.

Italian steelmakers were reportedly sold out for December rolling HRC and some temporarily withdrew their offers to reconsider their prices.

Buyers said the tradable level was about €620-630 per tonne ex-works, which is in line with the most recent transactions for December-rolling HRC in Italy, at €635-640 per tonne delivered (equivalent to €620-625 per tonne ex-works), Fastmarkets understands.

Imported HRC remains largely uncompetitive in Europe due to the long lead times and the relatively small gap with European prices.

HRC from Asia was on offer in Europe at €610-620 per tonne CFR to Italy, with most suppliers offering January shipment.

And December-shipment HRC from Turkey was available at €640-650 per tonne CFR to Italy, duty included.

Published by: Julia Bolotova