Slow demand drags on European HRC prices; rebound seen unlikely

The European market for steel hot-rolled coil remained quiet on Wednesday September 6, with mills making an unsuccessful push for higher prices, sources told Fastmarkets.

Although buyers have gradually come back to the market after their summer holidays and have started to inquire for tonnages, traded volumes of HRC remained low.

“We have an impression that most [steel service centers] are trying to reduce their stocks because there is strong competition between them. So there is not much restocking going on in the market now,” a trader from the Benelux area told Fastmarkets.

Leading European steelmakers kept their official offers for October-delivery HRC at €700 ($752) per tonne ex-works, but this figure was “unachievable,” according to buyer sources.

“It is not possible to consolidate higher prices [for processed HRC] in downstream sales, so €700 [per tonne ex-works for HRC] looks far away from reality,” a source from a steel service center in Germany said.

Buyer sources indicated that the tradable price in Northern Europe was €640-660 per tonne ex-works. One mill from the Benelux area was reported selling small tonnages of HRC at €650 per tonne ex-works.

Most market sources said that slow consumption was the major obstacle to a sustainable HRC price rebound. In general, they put their hopes on price stabilization in the near term.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €648.60 per tonne on September 6, down by €6.73 per tonne from €655.33 per tonne on September 5.

The index was also down by €1.61 per tonne week on week but up by €2.77 per tonne month on month.

And Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy was €635.00 per tonne on September 6, down by €0.42 per tonne from €635.42 per tonne on September 5.

The Italian index was down by €0.83 per tonne week on week and by €1.25 per tonne month on month.

Buyers’ estimates of achievable levels were around €625-650 per tonne ex-works.

A mill in Italy was hoping for €700 per tonne delivered (€680-685 per tonne ex-works), but slow consumption and low downstream prices made such prices unrealistic.

Meanwhile, buying interest for imported coil in Europe was low due to long lead times and safeguard-related risks.

“There are significant tonnages of import HRC waiting to be customs-cleared for the fourth quarter, sitting in European ports. The risk of having to pay the 25% import rate, due to [a complete take-up of EU import] quotas, makes buyers hesitate to buy,” a trading source in Europe said.

Import offers from India, South Korea, Japan and Taiwan for October-November shipments were reported at €610-630 per tonne CFR to Italy.

Published by: Julia Bolotova