Trading activity in the European hot-rolled coil market remained subdued on Thursday August 18 with buyers increasingly pessimistic about low demand heading into the fourth quarter because of persistent overstocking among buyers and depressed end-user consumption, Fastmarkets heard.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €751.67 ($764.58) per tonne on Thursday, down by just €5.83 per tonne from €757.50 per tonne on Wednesday.
The latest calculation of the index is down by €42.08 per tonne week on week and by €99.58 per tonne month on month.
Market sources estimated achievable prices at €750-770 per tonne exw on Thursday.
Mills, despite offering discounts, contended with low volumes traded because of high inventories among buyers, Fastmarkets heard.
Market activity remained quiet, as would be expected during the low season, with buyers delaying large-volume orders until September, by which time there was expected to be more clarity around price trends. Some small-volume orders were achieved, however.
A pessimistic outlook regarding post-holiday prospects persisted, with some sources not expecting the traditional revival of trade in September. Mills remained unlikely to restart in September with the offer prices they initially planned, one market participant said. Continued low demand could create downward pressure on prices.
A gloomy outlook persisted in regard to whether demand from the automotive industry would pick up in the fourth quarter. With a possible recession looming, fears around sliding consumption continued to create uncertainty, Fastmarkets heard.
Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, was €740.00 per tonne on Thursday, down by €3.75 per tonne from €743.75 per tonne the day before.
The latest calculation of the Italian index is down by €31.00 per tonne week on week and by €30.00 per tonne month on month.
The calculation was based on buyers’ estimates of achievable prices reported at €720-750 per tonne exw.
As a result of summer maintenance closures, there was minimal trading activity, Fastmarkets heard.
Buyers were postponing their restocking activity until September in order to more accurately assess key trends such as energy cost increases and possible low consumption levels, sources told Fastmarkets.
Imports
Demand for overseas coil was also subdued in the week to Thursday.
Offers of Turkish HRC imports were reported at €690-700 per tonne cfr Antwerp.
Overall, demand among domestic buyers for imports remained low.
“In general, EU buyers are not very interested in overseas HRC bookings for the time being, due to long lead times and little difference with the domestic HRC prices in Europe,” a market participant said.
Published by: India-Inés Levy
