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.
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
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
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 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.
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
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €645.83 ($710.69) per tonne on Monday, unchanged from Friday August 4.
Most mills have withdrawn from the market as is typical for this time of year.
During the week to Friday August 4, producers in Northern Europe were offering November-rolling HRC at around €700 per tonne EXW.
Meanwhile, buyers’ estimates of the tradable level were heard at €630-650 per tonne EXW on Friday.
Activity was essentially non-existent across the European HRC market. Some sources were optimistic that demand and prices could pick up in September, Fastmarkets heard.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €636.25 per tonne on Monday, unchanged from Friday.
The Italian market was in holiday mode and most mills and buyers were inactive.
Buyers’ estimates for workable prices for September-October-delivery HRC were reported at €630-640 per tonne ex-works during the week to August 5.
No fresh import offers were reported.
Published by: India-Inés Levy
The European hot-rolled coil market traded sideways Aug. 4 as most players were absent from the spot market.
Sources said some mills were hinting at future price rises following the summer when restocking activities are expected, but that current trading was limited.
“Mills and end-users are keeping a low profile at the moment,” said a Benelux distributor.
“Our stock is sufficient including for September. Not sure where prices will go, so no reason to buy now,” the distributor added.
An Italian mill offer for September was heard at Eur700/mt EXW Italy minimum Aug. 4 but no business was reported at that level.
Sources said some mills were slowly positioning themselves for expected restocking activity after August and were thinking about increasing offer prices.
However, some sources said this would rather be to maintain current price levels amid a mixed view on sustained price increases in Q4.
The European market is expected to remain quiet in August amid maintenance works and summer stoppages at suppliers.
Platts daily HRC assessments in Italy and in the Ruhr region were assessed unchanged Aug. 4 at Eur635/mt EXW Italy and Eur640/mt EXW Ruhr, respectively.
Platts is part of S&P Global Commodity Insights.
Author Laura Varriale
The European hot-rolled coil market remained quiet amid the summer lull while market chatter surrounded increasingly full import quotas which have resulted in material being kept on hold to be cleared at ports, sources said Aug 3.
Sources expect that particularly Italian ports have at least 300,000 mt of HRC awaiting clearance at ports for the quota period starting Oct.1.
According to the European Commission, the “other country” quota for the current quota period (July 1 to Sept. 30) had been exhausted July 25 while the current quota balance for South Korea was shown as critical Aug. 3 with 92.03% filled.
“There will be a lot of material for the end of the year [in Europe],” said an Italian service center.
“Oct. 1 could see big congestions at ports,” said the source, adding that most importers are keeping the material on hold for the next quota period to avoid a 25% duty that applies when quotas have been exhausted. Import offers into Italy were heard at Eur600-605/mt CIF Italy.
Domestic HRC prices in Italy and Northwestern Europe saw no change. One mill source said prices ex-mill would be Eur670-680/mt ex-works Ruhr, while another distributor said prices from Central-Eastern Europe were at Eur620-630/mt EXW, although buying remained limited.
An Italian mill was heard to offer at Eur660-680/mt EXW for prompt.
The daily Platts assessments for HRC EXW Ruhr and HRC EXW Italy remained unchanged Aug. 3 at Eur640/mt and Eur635/mt, respectively.
Platts is part of S&P Global Commodity Insights.
Author Laura Varriale, Maria Tanatar
Italian welded tube prices are seen increasing in September, in line with the expected increases in coil values. The welded tube market remains subdued, with demand weak and prices depressed in most European countries, sellers and buyers tell Kallanish.
Tube values continue to lag behind hot rolled coil tags due to weak downstream demand. Uncertainty is dominating the market, which is now quiet due to the August holiday break. Discounts remain at 37-39 points, with purchases implemented only back-to-back and prices unsustainable compared to processing costs.
Commodity grade 40x40x3 product remains at €800/tonne ex-works, which provides practically no margin. While some positive signals are coming from the automotive sector, many other industries are ordering low volumes and distributors are keeping stocks low. Tube sales in July and the first week of August are reported to be weak with no significant restocking occurring.
The Italian and European HRC market is however forecast to become livelier in September and prices to increase, pushed up by the exhaustion of EU import quotas. Third-quarter quotas from Vietnam, Indonesia and other Asian countries are already exhausted, while few tonnages remain from Korea. Buyers can import only from Turkey, whose suppliers are offering higher prices, as well as from India.
HRC buyers say Korean suppliers will give no allocations to Italy for Q4 and new import quotas will expire on 1 October, the same day as they are renewed. Amid the general downturn of the steel sector in Europe, this seems the only good news for September, and both coil and coil derivative prices are seen increasing, albeit gradually. The market remains fragile. Downstream demand and consumer confidence are seen remaining weak, with no surprises until the end of the year.
The target for re-rollers is to reach 35 points for tube discounts. Sources see September HRC prices at €700/t ($766) base ex-works.
Natalia Capra France