The European domestic flat steel sector fell silent on Thursday July 2, digesting the new EU import quotas announced earlier in the week. Some local suppliers, particularly in Italy, withdrew from the market to assess new offer prices.
Opinions on the future development of prices differed, with some sources expecting dramatic rises as early as next week, while others believed that price increases would be gradual.
Two Italian sources reported the most recent indications of tradeable prices at €680,00 ($776) per tonne ex-works, which was reflected in Thursday’s index.
Fastmarkets’ assessment of the steel hot-rolled coil index, domestic, exw Italy, was €680.00 per tonne on July 2, up by 1.87% day on day from €667.50 per tonne.
The index was up by €6.67 per tonne week on week and up by €2.50 per tonne month on month.
One of the sources expected fresh offers to surge to €750 per tonne ex-works next week, considering the lack of competition inside the country.
“I think that a large portion of the quotas for hot-rolled coil and cold-rolled coil will remain unfilled due to the uncertainties connected with Carbon Border Adjustment Mechanism [CBAM] costs,” he said, forecasting HRC import volumes to drop by 60% year on year and CRC by 80%.
“Local mills in Italy have nothing to lose if they increase prices,” he added.
Another Italian market participantwas more modest in his forecasts. “As long as there are unsold volumes of August production material in Europe, liquidity will take precedence over prices,” he said. “Once some of the buyers assess their potential missing volumes – due to inability to customs-clear material in the third quarter from single origins – we will see an evolving picture. We expect slightly higher prices for September production material, and further increases in the fourth quarter.”
Northern Europe was also quiet, with no major sales heard during the day.
One buyer reported mills’ offer indications at €700-735 per tonne ex-works on July 2, but these were not firm offers for August rolling, which were expected to come to light next week.
The same source, however, said that tradeable prices have not reached these levels yet, but found it difficult to estimate tradeable levels due to the lack of trading during the day.
A seller source from the Benelux area reported offers for August rolling at €700 per tonne ex-works and €740 per tonne per tonne ex-works for September production. The latter price point was discarded because it exceeds Fastmarkets six weeks maximum timing window.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was calculated at €690.94 per tonne on July 2, up by €9.06 per tonne from €681.88 per tonne on July 1.
The index was up by €8.44 per tonne week on week and by €3.44 per tonne month on month.
