‘Sink or swim’ in mostly stable UK HRC market

The UK hot-rolled coil market was reported as mostly stable on week, with prices edging down slightly on minimal demand.

Distribution sources said Aug. 5 they were focused on moving stocks but had to work harder to obtain orders – both due to the summer slowdown and wait-and-see sentiments characterizing the market in recent weeks.

“Things are tough at the moment and everyone’s chasing buyers for cash flow reasons. We have to keep stock turning – it’s sink or swim,” said a trader source.

Offer levels from domestic and European mills were heard as largely stable, at GBP700-710/mt DDP West Midlands.

Stock levels were still reported as high, however, restricting potential for restocking.

“Luckily the mills are less aggressive this week, the market doesn’t seem to have gotten any weaker, but there’s still too much material in the system,” said a stockholder source. “We’re hearing more positivity from Europe in terms of volumes shifted, so hopefully the UK follows soon.”

Another trader agreed, seeing price as largely irrelevant in the current market.

“It’s not really a question of price at the moment,” the source said. “Everyone has too much material – often purchased much higher than current outsale prices to customers – so we need to see stocks go down further before purchasing resumes.

“I think all agree we’re close to the floor now, so hopefully prices rebound soon. It’s not entirely doom and gloom, restocking will have to happen at some point.”

A distributor source reported the same, saying sales to end-users had continued to slide despite upstream stability in mill offers.

Platts assessed HRC in the UK down GBP5/mt Aug. 5, at GBP705/mt DDP West Midlands.

— Benjamin Steven, Maria Tanatar