Domestic prices for European hot-rolled coil remained flat Sept. 18, as buyers focused on de-stocking material, and a largely pessimistic mood prevailed in the market.
“Service centers are de-stocking, not restocking,” a Germany-based mill source said. “There are very low volumes in the market, and all mills are suffering.”
Inventory levels in the market are running high, and macroeconomic conditions are worsening, leading to bankruptcies and a weak domestic market, sources said.
“Economy is not doing that well,” a Netherlands-based service-center source said. “There are a lot of bankruptcies in [the] Netherlands. The automotive sector is weak and customers are canceling orders. Germany is in recession due to automotive, construction sectors.”
Domestic European mills are in a dilemma, sources said, about whether to pursue market share by lowering offer levels, risk losing money by keeping prices firm, or reducing output and losing CO2 emissions allowances for next year.
“European mills are in a dilemma because if they don’t follow lower prices, they will lose market share,” the source said. “If they follow prices, they will lose money but have CO2 emissions allowances for next year. If they reduce production, they will lose this allowance, but maintain price level. I think eventually they will fire employees to minimize losses.”
Platts assessed Northwest European HRC stable on the day at Eur555/mt ex-works Ruhr Sept. 18. Offers were reported in the range of Eur550-580/mt ex-works Ruhr, from a buy-side source.
Platts assessed domestic HRC prices in Southern Europe also stable on the day at Eur555/mt EXW Italy, with offers reported at Eur580-570/mt EXW Italy.
Interest in imported HRC remains weak due to concerns around longer lead times and risks of safeguard duties. However, sources also noted that the safeguard measures have allowed other countries not subject to the measures to come in with competitive import offers.
“The quota cap system has allowed new countries such as Australia and Saudi Arabia to come to Europe,” the service-center source said.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur545/mt CIF Antwerp.
Meanwhile, Platts assessed imported HRC in Southern Europe also stable on the day at Eur540/mt CIF Italy.
