Buyers of HRC across Europe continued to hold back from big purchases, mainly booking what was strictly necessary to fill gaps in stock or for back-to-back business, sources told Fastmarkets.
“It’s very much a buyer’s market,” a trading source in Northern Europe said, adding that they have been receiving calls from producers asking whether there have been any inquiries.
European mills had short orders books, with end-October delivery said to still be available from some producers.
Buyers’ estimates of tradeable values were reported at €630-640 ($672-683) per tonne ex-works on Tuesday, while offers from integrated mills in the region were reported in a wider range of €630-680 per tonne ex-works. The upper end of the offer range, however, was not considered workable by buyers, given the poor demand and low downstream prices .
One of the major concerns for buyers was the weak consumption and poor performance of practically all the key steel end-user sectors, with the exception of the automotive industry, although it was still working below pre-pandemic levels.
Notably, in July 2023, the EU car market grew by 15.2% year on year, to 851,156 registered units. This growth, however, can be attributed to the region’s rebound from a low comparison base in 2022, primarily caused by vehicle component shortages, the European Automotive Manufacturers Association said.
“The consumption [of steel] in general is weak [and] there is no rebound in sight this year, I’m afraid,” a steel service center in Germany told Fastmarkets. “In September, our sales [of processed HRC] to [end users] were about 20% lower [year on year].”
Another factor limiting trading in the spot market was bearish expectations among buyers for October.
The next EU safeguarding import quota period will start on October 1, and market sources expected large tonnages of imported HRC to flood the local market and affect domestic prices in Europe.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €635.00 per tonne on Tuesday, down by €2.50 per tonne from €637.50 per tonne the previous day.
The index was down by €10.00 per tonne week on week and by €1.25 per tonne month on month.
Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy, meanwhile, was €623.33 per tonne on Tuesday, down by €2.92 per tonne from €626.25 per tonne on Monday.
The Italian index was down by €9.17 per tonne week on week and by €6.67 per tonne month on month.
Italian producers could offer coil for delivery in late October/early November, which indicated thin order books, market sources said. Offers were reported around €640-650 per tonne delivered (about €625-635 per tonne ex-works) for such material.
Similarly to Northern Europe, Italian buyers preferred to postpone restocking until October.
Import HRC offers, meanwhile, were largely stable compared with last week, although one supplier from Vietnam was reported to have lowered its offer due to a weak domestic market.
Offers from Vietnam for November-shipment coil were heard around €585 per tonne CFR to Italy.
Offers from Japan were reported at €600-610 per tonne CFR for January arrival.
And Indian suppliers were out of the market, with no interest in export sales to Europe because of their strong domestic market, market participants said.
Published by: Julia Bolotova