Quiet conditions prevail in European HRC market; prices flatten

European hot-rolled coil prices have stabilized and potential supply disruptions are likely to prevent further drops, but a rebound is unlikely in the short term due to low demand, sources told Fastmarkets on Wednesday June 28.Trading remained quiet in Northern Europe on Wednesday, with buyers still holding back from restocking, citing slow downstream sales.

Most market sources agreed that the downtrend that affected the market in the past several weeks has come to an end. They now expect HRC prices to stabilize in the coming weeks.

“Mills are hungry for orders, but not very willing to lower offered prices anymore. Production disruptions in Germany and France will affect [HRC] prices indeed, but not immediately,” a trader said.

“I hope the [HRC] price will stabilize, but the [end-user] demand is so low that I absolutely do not believe in a rebound,” a distributor said.

On Monday, authorities ordered the suspension of steelmaking operations at ArcelorMittal’s Fos-sur-Mer site in southern France due to environmental and worker-safety considerations. ArcelorMittal did not specify the timeline for the closure, only pointing out that “the company has established and implemented an action plan with all parties to reduce personnel exposure.”

The final decision on the plan is expected later in the week to July 7, sources said.

On the same day, German steelmaker Salzgitter declared force majeure on steel deliveries because of disruptions resulting from heavy rain in Germany.

Producers in Northern Europe were able to offer September-delivery coil, sources said, with offers reported at €680-700 ($744-766) per tonne EXW on Wednesday. At the same time, buyers’ estimates of tradeable values were €660-680 per tonne EXW.

A deal for a sizeable tonnage of HRC from a mill in the Benelux area was reported at €620 per tonne EXW, but this could not be widely confirmed by the time of publication.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €670.63 per tonne on Wednesday, down by just €1.37 per tonne from €672.00 per tonne on Tuesday.

The latest calculation of the Northern European index was down by €9.37 per tonne week on week and by €80.20 per tonne month on month.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €645.18 per tonne on Wednesday, down by just €0.81 per tonne from €645.99 per tonne on Tuesday.

The Italian index was down by €6.17 per tonne week on week and by €43.57 per tonne month on month.

Offers from integrated producers and re-rollers in the region were still being heard in the range of €650-680 per tonne EXW for August and September delivery.

One mill in the south of Italy was reportedly offering sizeable tonnages of commodity grades HRC at €620-630 per tonne CPT in Italy. But market sources said that such low offers had not impacted the price trend much.

“[Mills in the south] are absolutely irrelevant to real market levels. They are in a chronic delay for delivering orders,” a steel-service center source in Italy said.

Buyers’ estimations of tradeable values were still reported at around €640-650 per tonne EXW for small tonnages and around €620-630 per tonne EXW for sizeable volumes.

Buyers, however, were only booking small lots recently, postponing restocking.

HRC offers from Asian mills to Italy have been limited in the week to Wednesday.

Most sources reported a range of €610-620 per tonne CFR, mainly for August shipments from Vietnam and Taiwan.

Published by: Julia Bolotova