Summer trading standstill keeps European HRC prices flat

Prices of hot-rolled coil in the European market were mostly flat on Monday July 15 amid the summer trading lull, while the post-summer price direction remains unclear, sources told Fastmarkets.

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €631.25 ($688.26) per tonne on Monday, down slightly by €0.88 per tonne from €632.13 on July 12.

The index was down by €2.50 per tonne week on week and down by €3.75 per tonne month on month.

Offers of HRC in Northern Europe were reported at €640-670 per tonne ex-works or delivered, for August/September-delivery material. Some suppliers attempted to increase offers by €20 per tonne in previous weeks, but sluggish demand has been unsupportive of price rises.

Buyer sources estimated the tradeable market level in the range of €620-640 per tonne ex-works.

Trades were reported within that range on Monday, but only for small lots.

“European suppliers are in fact trying to stabilize prices, but there is just no demand and consequently no orders. The summer holidays have already started in Germany and many buyers will also be closed, so there is no interest to restock [HRC] now. Everyone will wait to see what the market will look like in September,” one buyer in the region told Fastmarkets.

There was also no clarity on the direction of prices after the summer.

Some source suggested that the changes offered to the EU steel safeguard measures, effective as of July 1, will limit cheaper imports into the EU and help European mills to achieve price increases.

At the same time, other industry sources said the effect of the new safeguard measures will likely be delayed.

“There are massive stocks of imported HRC at ports. New prices [for imports] will be higher, yes, but there is plenty of material to be sold – both of import and domestic origin. The market in Europe is oversupplied, while end-user demand is just insufficient, so price rises [for HRC] are highly unlikely,” a buyer in the Benelux area told Fastmarkets.

Meanwhile, in Southern Europe, Fastmarkets calculated its daily steel HRC index domestic, exw Italy at €625.00 per tonne on Monday, down by €1.00 per tonne from €626.00 per tonne on July 12.

The index was down by €1.25 per tonne week on week and down by €6.88 per tonne month on month.

HRC was on offer at €640-650 per tonne delivered in Italy, according to sources, which nets back to €630-640 per tonne ex-works.

A local supplier reportedly still had August-delivery coil available.

Market sources estimated the workable market level at €620-630 per tonne ex-works.

“For big tonnages it is possible to obtain discounts, but nobody is really booking lots over 500 tonnes,” one buyer in Italy said.

Offers of HRC from Turkey were available at €610 per tonne CFR to Italy, including the anti-dumping duty.

Several sources reported an offer from Indonesia at €600 per tonne CFR to Italy, for September-shipment coil.

“[The Indonesian mill] has built a new HRC line. They are testing the waters in the EU market and is sure to become more active in September-October,” a buyer in Italy said.

Published by: Julia Bolotova

fastmarkets.com