European HRC prices under pressure from low demand
Trading in the spot HRC market remained weak in Northern Europe, with transactions mainly heard done for limited volumes.
“There is no restocking; everyone buys only what they absolutely have to,” a mill source in the region said.
“The price tendency is going down. It started [during the week to February 9] and mills are still looking for orders for the second quarter, but [real] demand is still very weak,” a trading source told Fastmarkets.
Offer prices for April-delivery HRC were reported at €740-760 ($795-816) per tonne ex-works from integrated mills in the region.
Buyer estimates of tradeable values were no higher than €730-750 per tonne ex-works.
Two sources reported sales of Germany-origin coil at €720-730 per tonne ex-works on Tuesday, but it was not widely confirmed at the time of publication.
Italy-origin coil of March rolling was said to be offered at €760 per tonne ex-works in Germany.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €746.00 per tonne on Wednesday, down by €1.50 per tonne from €747.50 on Tuesday.
The index was down by €9.38 per tonne week on week, but up by €14.12 per tonne month on month.
Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €735.63 per tonne on Wednesday, down by €8.12 per tonne from €743.75 per tonne on Tuesday.
The index was down by €17.12 per tonne week on week, but up by €13.96 per tonne month on month.
Italian mills have reduced HRC prices to fill order books for second-quarter delivery, but sales remained slow.
Offers were reported at around €750-760 per tonne delivered from local suppliers for April-delivery HRC.
“Real demand is still weak and prices [for processed coil] in the secondary market are not increasing,” a buyer in Italy said.
Buyers estimated achievable values for April-delivery HRC at €740-750 per tonne delivered (€725-735 per tonne ex-works) compared with €760-770 per tonne delivered (€745-755 per tonne ex-works) achieved for March delivery.
Despite the price declines, trading remained dull in the local market with buyers keeping to the sidelines and not restocking, citing “very slow sales downstream.”
In the secondary market, 4mm HR sheet was traded no higher than €820-830 per tonne CPT.
Meanwhile, imports were quiet due to the Lunar New Year in Asia.
Offers from India were heard at €670 per tonne CFR on Wednesday.
Offers from Japan and Egypt came in at €640-650 per tonne CFR, sources said, while those from Vietnam were heard at €630 per tonne CFR.
Most overseas suppliers were already offering April-shipment cargoes.
Despite the downtrend in the import coil segment and the increasing gap between European and import HRC, most sources agreed that pressure from imports was minimal so far.
“Importing coil is complicated due to fast-depleting quotas, logistics issues caused by uncertainty in the Red Sea and longer lead times. Big companies who traditionally rely on imports will keep booking [imports] no matter what, while those who need quicker shipment will have no alternatives but the EU mills,” a buyer in Italy said.
Published by: Julia Bolotova
UK Trade Remedies Authority expects steel HRC safeguard to be suspended
The UK’s safeguard on hot-rolled coil (HRC) may need to be removed, the UK Trade Remedies Authority (TRA) said today, announcing both suspension and tariff-rate quota reviews on the product.
The TRA has initiated both reviews following applications from Tata Steel UK and Kromat Trading, each in response to Tata’s plan to close its blast furnaces and import HRC and slab, it said today.
“Based on the applications and from other evidence available on the current state of the market, it is the TRA’s preliminary view that the measure should be suspended,” the TRA said. Tata’s plan would mean the current level of duty-free quota for HRC would be insufficient for UK needs, it said, suggesting imports are already facing duties because of the increase on volumes contributed to by Tata’s importation of HRC.
The TRA provisionally believes the safeguard on HRC should be suspended for nine months.
Its review considers the plan Tata submitted to trade unions on 19 January, and if these plans change, it will take this into account during its review. Once the TRA has completed its review, it will make recommendations to the Secretary of State for Business and Trade, who makes the final decision.
If any suspension recommendation is made and accepted by the government, the TRA will use the period to rework the quota system, enabling sufficient volumes for the market going forward. The quota could be global and importers potentially would be apportioned their own volumes, but it is not yet clear how this would be worked out, or if the plan could be amended in the course of the review.
“These reviews are designed to prepare the current steel trade regime for future changes in production at Port Talbot,” TRA chief executive Oliver Griffiths said. “We want to avoid a situation where new imports needed to backfill reduced domestic production pay tariffs of 25pc, loading additional costs on to the UK economy.”
European buyers avoid HRC deals on sufficient stocks
European domestic hot-rolled coil prices remained fairly stable on Feb. 2 as buyers limited purchase volumes due to high inventory levels.
“A lot of import has arrived in Europe and volumes booked earlier from European mills have also arrived,” a service center source said. “As stocks have gone up, the buyers are not willing to accept higher prices.”
Market participants also remained hesitant about near-term price trend due to lack of real demand and improved supplies as steelmakers restart idled blast furnaces.
Deals have been reported at Eur750-760/mt ex-works Ruhr. Tradable values were reported at Eur730-770/mt ex-works Ruhr.
Platts assessed the price of domestic hot-rolled coil in Northwest Europe down Eur5/mt on the day at Eur755/mt ex-works Ruhr Feb. 2.
Interest in imported material remained muted, which aided domestic sentiment.
“Nobody is keen to buy import due to long lead times,” a trader said. “Further delays caused by the geopolitical issues at the Black Sea and concerns regarding safeguard quotas are also decreasing demand for imports.”
Offers for imported HRC were heard at Eur710/mt CIF Antwerp from Asia.
Platts assessed the price of imported HRC in Northwest Europe down Eur20/mt on the day to Eur660/mt CIF Antwerp Feb. 2.
In South Europe, deals for HRC were heard at Eur750/mt ex-works Italy and offers were heard at Eur750/mt ex-works Italy. Tradable values were estimated at Eur750-770/mt delivered Italy.
Platts assessed the price of domestic HRC in South Europe stable on the day at Eur750/mt ex-works Italy Feb. 2.
Imported HRC offers were heard at Eur630-680/mt CIF Italy from Asian mills. Turkish mills made offers at above Eur700/mt ex-works Italy, including anti-dumping duties.
Platts assessed the price of imported HRC in South Europe stable on the day at Eur675/mt CIF Italy Feb. 2.
HRC bucks EU imports decline in 2023
EU hot rolled coil imports in 2023 increased by almost 18% year-on-year, according to the latest data shared by EUROMETAL and compiled using official customs numbers.
Overall, HRC imports surpassed 18 million tonnes. Italy was the largest importer with over 3.5mt, followed by Spain with 1.3mt, and Belgium with 900,00t, Kallanish notes.
The recovery in HRC imports nevertheless bucked the overall import trend last year in Europe. According to the same data, EU imports of flat products – including non-alloy and stainless – decreased 3% y-o-y to 19mt.
Similarly, all other major steel products imports registered a decrease in 2023.
Metallic coated sheet imports fell 18% y-o-y to 3.6mt, while cold rolled coil imports were down 1.5% to 2.5mt.
On the longs side, overall imports of non-alloy and stainless products registered a decrease of 20% y-o-y to 7.5mt. Rebar imports were down 29% to 1.2mt and wire rod imports decreased 25% to 2mt.
Emanuele Norsa Italy
EU Flat Steel Summary by Argus Media
Northwest European hot-rolled coil prices edged up over the past week, but there is much uncertainty over real consumption over the rest of the year.
Argus’ daily northwest European HRC index was €632.50/t on 23 August, up €3.25/t from 6 August. In Italy activity is only just restarting after the summer break, with many participants still out on holiday. Argus’ daily Italian HRC index slipped from €631.75/t on 16 August to €630.25/t on 23 August.
One Italian mill has still been offering September delivery coil at €640/t delivered base to some service centres in the past week. This has spooked some, given September is not far away. Shorter lead times make it harder to mills to remain firm on price.
One leading European producer has announced €700/t ex-works to some customers in the last few days, although it is not necessarily a unified offer just yet. Other steelmakers are expected to table higher quotes in response.
However, demand is the big concern.
Service centres in Germany and Italy report low appetite from end-users, with some buyers cutting their volume budgets by 20-30pc. As a result coil stocks are starting to increase with German service centres, despite their destocking attempts amid high financing costs. The stock-to-sales ratio for cold-rolled coil reached three months in July, the highest level since last December.
Even steelmakers concede there has, as of yet, been little sign of any September restock. But they hope the increase announcements spark some apparent demand, prompting a stronger buying cycle.
European HRC prices stable amid negative sentiment
Market sentiment for September, when buyers and sellers traditionally return to trading, has been downward due to an uncertain demand outlook from end-users combined with need of domestic mills to fill orders books and significant volumes of import either awaiting custom clearance or on the way to the EU.
“Market is catastrophic in terms of the daily business,” a German service center source said. “But the main thing — the outlook is pessimistic for the second half of the year. The mills say they have allocations for some volumes of coil for a week, but then they give more volumes. So, their order books are far from being full.”
“No change in prices,” a Northwest European service center source said. “Everyone is enjoying holidays before September and then — no positive expectations. There is clear oversupply and no hope for demand recovery. Prices most likely would go down.”
Platts assessed domestic prices for hot-rolled coil in Northwest Europe unchanged on day at Eur635/mt ex-works Ruhr Aug. 15.
Market participants estimated tradable values at Eur630-640/mt ex-works Ruhr and reported offers at the equivalent of Eur635-640/mt ex-works Ruhr.
Import offers in Northwest Europe have been heard at Eur620-630/mt CIF Antwerp for the material from Asia. Buyers have been showing no interest in the material due to both uncompetitive prices and lead times — currently Asian mills have been offering December delivery material. Some market sources said they believed that buyers will show higher interest in imported coil when January delivery becomes available.
Author Maria Tanatar
European HRC market quiet amid seasonal closures
Fastmarkets calculated the daily steel HRC index, domestic, exw Northern Europe at €644.58 ($705.43) per tonne on Monday, unchanged from Friday August 11.
The Northern Europe index was down by €1.25 per tonne week on week and down by €27.67 per tonne month on month.
Seasonal effects and weak demand resulted in a flat market, sources said.
In the week to August 11, most buyers’ estimates of a tradable price were in the region of €620-650 per tonne ex-works.
Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy was €633.68 per tonne on Monday, also unchanged from Friday.
The Italy index was down by €2.57 per tonne week on week on Thursday, and down by €21.32 per tonne month on month.
In the week to August 11, buyers’ estimates of workable prices for HRC for delivery in September-October were reported at €630-640 per tonne ex-works.
No fresh import offers were reported on August 14.
Published by: India-Inés Levy
Quiet conditions persist in European HRC market amid seasonal closures
Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe, was calculated at €644.58 ($708.89) per tonne on Friday, unchanged from the previous day.
The Northern Europe index was down by €1.25 per tonne week on week and down by €36.25 per tonne month on month.
Summer holiday absences resulted in no new trades being reported.
Earlier this week, on Wednesday, most buyers’ estimates of a tradable price were in the region of €620-650 per tonne ex-works, but one buyer source reported a higher estimate of €650-680 per tonne.
Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy, was €633.68 per tonne on Friday, also unchanged from the previous day.
The Italy index was down by €2.57 per tonne week on week on Thursday, and down by €27.57 per tonne month on month.
Earlier in the week, buyers’ estimates of workable prices for HRC for delivery in September-October were reported at €630-640 per tonne ex-works.
No fresh import offers were reported on Friday.
Published by: India-Inés Levy
North European HRC prices dip amidst seasonal slowdown and economic concerns
North European hot-rolled coil prices fell over the past week, as some mills cut their prices to move tonnes in a very quiet demand environment.
Activity across the continent is very quiet, amid the holiday season. Parts of north Europe are yet to return, while southern European participants typically take much of August off.
This seasonal quietness is, as usual, sparking fears over the health of demand, both from intermediaries and end buyers. Economic weakness in Germany, which is underperforming the wider Eurozone in terms of manufacturing and construction activity, is further dampening sentiment.
One large producer has taken a scythe to its contractual offers. After securing July-December volumes close to €800/t with northern buyers in recent months, it has started to offer additional volumes closer to €600/t to move surplus tonnages – this is below prevailing spot prices, whereas the initial accords were at a steep premium.
Mills trying to commit more contractual tonnages at such import-busting prices suggests they do not hold a firm outlook for spot prices in the coming quarter, despite the potential restocking that could occur in September – buyers have largely been absence from the spot market since the second quarter, after an earlier restock in the December-March period, so they could replenish to an extent after the holidays. That said, there is a lot of material on the ground after a big increase in imports in May, and call-offs from a number of important end-use sectors have reduced. Northern mills have offered to large Iberian buyers as low as €620/t delivered base, normalising below €600/t on an ex-works basis.
Argus’ daily northwest EU HRC index was €622/t on Wednesday 9 August, down €28/t from 2 August. The Italian market has been much calmer, with holidays in full swing. Argus’ daily Italian HRC index was €631.75/t on 9 August, down €2/t over the same period.
EU HRC market stable; producers lack unified pricing approach
Steelmakers, in the meantime, lacked a unified approach to pricing as some continued to give discounts to sell volumes and others have made unsuccessful attempts to raise offers to Eur680-700/mt delivered, sources said.
“Customers asking [for a] lower price in EU,” a distributor said. “Generally, in prices, there is a rollover situation—no real movement and no real consumption.”
“It is an interesting market at the moment as some mills are asking for higher prices, but I think it is most likely to stop the price decline,” a trader said.
Platts assessed domestic HRC prices in Northwest Europe at Eur640/mt ex-works Ruhr Aug. 7, unchanged.
Market participants estimated tradable values at Eur620-650/mt EXW Ruhr and at Eur650/mt delivered Germany.
A trader reported a deal at Eur580/mt EXW Ruhr, but it was excluded from the assessment as other market participants did not confirm the transaction.
Platts assessed domestic HRC prices in South Europe also unchanged at Eur635/mt EXW Italy Aug. 7.
Author Maria Tanatar
