Steel HRC restocking limited in Europe, but mills still mull new price rises

Steel hot-rolled coil prices in Europe edged up slightly in deals on Wednesday November 22, with a bullish mood prevailing among sellers, despite consumption levels remaining low, industry sources told Fastmarkets.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €659.75 ($721.73) per tonne on November 22, up by €3.50 per tonne compared with €656.25 per tonne on Tuesday.

The index was up by €14.62 per tonne week on week and by €46.62 per tonne month on month.

Transactions were reported at €650-660 per tonne ex-works in the region, while buyers estimated the achievable price to be €650-670 per tonne ex-works.

But buyers were booking only small tonnages in the highly volatile market.

“We all understand that the recent price rises are entirely cost-driven, supported by reduced supplies,” a trader in the region said. “But without support from end-user demand, [price increases] might not be sustainable.”

The most recent booking was still below integrated mill offers in the region, which were heard at €680 per tonne ex-works and at €700 per tonne ex-works for January-delivery coil.

In general, lead times for HRC in Northern Europe varied between six and eight weeks, Fastmarkets understands.

Despite a slow pace of restocking and subdued demand from end-users, producers in Europe were planning to announce another round of price rises for first-quarter-delivery HRC, with offers expected to be “above €700 per tonne ex-works.”

“[Integrated mills in Europe] gave a price idea for February delivery of €730 per tonne ex-works,” a steel service center source told Fastmarkets.

In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €639.38 per tonne on Wednesday, up by €4.38 per tonne from €635 per tonne on Tuesday.

The index was up by €6.88 per tonne week on week and by €41.71 per tonne month on month.

Italian mills were offering January-delivery HRC at prices no lower than €650 per tonne delivered in the local market, which would net back to about €635 per tonne ex-works, market sources said.

For February lead times, price ideas were closer to €680 per tonne delivered (around €665 per tonne ex-works).

Even though real consumption remained low in Italy, some sources said that there were signs of a revival in buying interest in the spot market.

“Even the most skeptical buyers see that the low prices are gone, [and] reduced domestic supplies and an uptrend in imports support the uptrend [in the domestic HRC market],” a source in Italy said.

In the secondary market, prices for HR sheet started to pick up in the week to November 22, to about €740-750 per tonne CPT, compared with €720-740 per tonne CPT a week earlier.

Overseas HRC suppliers to Europe were also seeking higher prices, with offers from Asia heard no lower than €620-630 per tonne CFR, for January shipment coil.

Offers from Indian mills were heard at €640-650 per tonne CFR to Italy, while HRC from Egypt was on offer in Italy at €620 per tonne CFR.

Published by: Julia Bolotova