Italian HRC buyers clear customs, fear high duties
The hot rolled coil market in Italy is currently facing notable stagnation, characterised by low order volumes and subdued consumption from end-users and coil service centres, industry sources tell Kallanish.
As of 1 October, the majority of HRC import buyers successfully cleared through customs the stocks they had in consignment at ports, coinciding with the renewal of EU import quotas.
It is anticipated that Italian buyers will incur an average duty of approximately 10%, or potentially slightly less, contingent upon the material’s origin. The duty rates for HRC stand at 4.2% from Egypt, 7.5% from Taiwan, 12.5% from Japan and 10.5% from Vietnam.
Contracts that were implemented in March and April at HRC pricing more than €100/tonne ($110.3) higher than current levels will be subject to duty payments. Service centres and re-roller sources indicate they will face significant financial challenges due to the duty, particularly in light of current low consumption levels and soft pricing.
A service centre doubts the recent increases implemented by ArcelorMittal will be successfully passed on downstream. “Certain customers are facing challenges in maintaining production levels throughout the week. Some have resorted to reducing their output. Additionally, the automotive industry, along with other sectors, is currently unable to absorb the existing steel production levels,” the source comments. A re-roller anticipates values may begin to rise gradually and expects customer activity to increase in October, following the sluggish purchasing observed in September.
Another service centre believes existing coil and derivative capacity is excessive. This, coupled with service centres’ high stocks, may hinder any prices hike.
Service centre quality HRC values in Italy are at approximately €530/t base ex-works but the level of €520/t has been heard in Germany. Cold rolled and hot-dipped galvanised coil are at €650-670/t base ex-works, with the low point of the range being paid for CRC.
ArcelorMittal told customers last week it is raising coil offers in Europe, with immediate effect. The steelmaker is now reported to be offering HRC at €590/t base ex-works, up some €40/t compared with offers registered last month. Other northern European producers are following suit (see Kallanish passim).
Natalia Capra France
European HRC market lacks clear direction; ‘wait-and-see’ sentiment prevails
Last week, a leading European steelmaker increased its offer price for November-delivery HRC to €590 ($647) per tonne ex-works or delivered, depending on the region, Fastmarkets reported.
On Monday, however, mills in Germany had not announced new higher offers, Fastmarkets understands.
“We are expecting some German mills to come back in the market with new prices this week,” a trader source based in Germany told Fastmarkets.
Some European producers and buyers are waiting for the Chinese Golden Week holiday (October 1-7) to come to an end before predicting the price developments in the global flat steel market, according to sources.
As a result, trading remained quiet on Monday.
One mill in Northern Europe was heard offering HRC at €550-560 per tonne ex-works, which was €20-25 per tonne higher than its previous offer, a buyer source told Fastmarkets.
According to the buyer, the previous offer levels could also be available for buyers, however.
Sources indicated the workable market level for HRC in Northern Europe at €530-550 per tonne ex-works.
A second buyer source told Fastmarkets that for larger tonnages even lower prices of €520-530 per tonne ex-works could be achieved.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €538.08 per tonne on Monday, down by €2.75 per tonne from €540.83 per tonne on October 4.
The index was down by €3.59 per tonne week on week and by €42.67 per tonne month on month.
In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €540.00 per tonne on Monday, up by €5.00 per tonne from €535.00 per tonne on October 4.
The Italian index was up by just €1.00 per tonne week on week and down by €40.24 per tonne month on month.
Fastmarkets sources estimated the workable market level for HRC in Italy at €530-550 per tonne ex-works.
Some customers in Italy have indicated that they could accept a price level of €550 per tonne ex-works, but suppliers in Italy were asking for even higher prices, according to a third buyer source.
Regarding imports, trading also remained muted due to the Golden Week holiday in China. Most Asian suppliers have withdrawn their offers and are expected to return with new higher levels later this week.
European HRC prices edge lower on sluggish demand, continuing destocking
Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €541.67 ($604.66) per tonne on Monday, down by €3.54 per tonne from €545.21 on Friday September 27.
The index was down by €14.33 per tonne week on week and by €49.58 per tonne month on month.
Official offers remained limited in the market, with deal prices decided on case by case basis, Fastmarkets understands.
One integrated mill in Northern Europe was heard offering HRC at €570 per tonne ex-works.
But market participants estimated the workable level at €530-550 per tonne ex-works.
One buyer source told Fastmarkets the situation was likely to change once China’s Golden Week national holiday (October 1-7) had come to an end.
The source said China would change the direction of steel prices after the holidays, leading to an uptick that will even be felt in the European HRC market.
On Friday, China’s central bank announced several measures to support the economy to meet this year’s 5% growth target, resulting in positive sentiment across the Chinese steel market.
But a second buyer source told Fastmarkets the situation in Europe might turn out to be more complicated.
“The automotive industry is still struggling and destocking continues,” the source said, adding that that rock bottom HRC prices might be close and that some positive changes were likely before the end of the year.
In Southern Europe, Fastmarkets’ corresponding daily steel HRC index domestic, exw Italy was €539.00 per tonne on Monday, down by €2.67 per tonne from €541.67 per tonne on Friday.
The Italian index was down by €17.25 per tonne week on week and by €52.25 per tonne month on month.
In Italy, one domestic supplier was heard offering HRC at €560 per tonne delivered, with lead times ranging from late October to early November. This would be equivalent to €545-550 per tonne ex-works, according to sources.
Other European suppliers were heard offering HRC to Italy at a similar level, but some deals were heard at €540 per tonne ex-works, Fastmarkets understands.
Buyer estimates for the workable market level came in at €540-550 per tonne ex-works.
Some sources said that even €520-530 per tonne ex-works could be achieved for larger tonnages, although such levels could not be widely confirmed.
Interest in imported HRC, meanwhile, remained limited in Europe.
EU HRC market remains largely stable as buyers avoid bookings
Domestic prices for European hot-rolled coil remained largely stable on Sept. 20, as buying activity remained limited in the market due to low end-user demand.
“Buyers, such as service centers and distributors, are not in a great position to offload material,” an Italy-based mill source said. “Therefore, they are not in a great rush to buy. End-user demand is just not enough.”
“Pricing is not the problem,” a distributor source said. “Problem is low/no demand.”
Platts assessed Northwest European HRC stable on the day at Eur555/mt ex-works Ruhr on Sept. 20. Tradable values were reported at Eur550/mt EXW Ruhr from a buy-side source.
Platts assessed domestic HRC prices in Southern Europe also stable on the day at Eur555/mt EXW Italy, with tradable values reported at Eur540-580/mt EXW Italy.
Sources said that production overcapacity in Asia has made it difficult for European suppliers to compete with them. However, interest in imports still remained weak due to concerns around safeguard duties and anti-dumping investigations.
“Production overcapacity in Asia is making things difficult for EU suppliers,” a service center source said.
Platts assessed imported HRC in Northwest Europe at Eur540/mt CIF Antwerp, down Eur5 on the day.
Meanwhile, Platts assessed imported HRC in Southern Europe at Eur540/mt CIF Italy, up Eur5 on the day.
EU HRC prices remain stable as buyers await prices to bottom out
Domestic prices for European hot-rolled coil remained stable on Sept. 19, amid muted activity in the market, as buyers awaited prices to bottom out.
“The market is quiet,” a Germany-based service center source said. “European mills are struggling because prices have not bottomed out. I’m not seeing any big orders.”
Sources noted that from October onward, mills might hike prices in order to prepare for next year, however, nothing was confirmed yet. Market participants were already focusing on the first quarter of 2025.
“Mills will try to hike prices in October,” the source said. “September is bottom for prices, from October might see higher prices. Everybody is already talking about Q1 2025.”
Sources also noted that the only solution to support prices is to reduce capacities, adding that countries such as India have already reduced capacities by 20%, and that Europe should follow.
Platts assessed Northwest European HRC stable on the day at Eur555/mt ex-works Ruhr on Sept. 19. Offers were reported at a range of Eur560-570/mt ex-works Ruhr from buy-side sources.
Platts assessed domestic HRC prices in Southern Europe also stable on the day at Eur555/mt EXW Italy, with offers reported at Eur570/mt EXW Italy.
Interest in imported HRC remained weak due to rumors around additional antidumping investigations and concerns around longer lead times.
“Nobody is booking imports,” the source said. “Anti-dumping investigations are a big concern for imports.”
Platts assessed imported HRC in Northwest Europe stable on the day at Eur545/mt CIF Antwerp.
Meanwhile, Platts assessed imported HRC in Southern Europe at Eur535/mt CIF Italy, down Eur5/mt on the day.
Northern Europe HRC prices hit lowest level since December 2020
The downtrend has persisted in the European HRC market since the beginning of September.
Trading remained very slow, with distributors and steel service centers having no need to restock due to continued weak end-user demand, Fastmarkets heard. Besides, sources said they were expecting prices to sink deeper and therefore preferred to hold back from bookings.
“Lead times from mills are very short; you can get [HRC] in under four weeks in some cases,” a buyer source in Germany said.
Offers in the country were reported at €570-580 ($629-640) per tonne ex-works, while in the Benelux area, one integrated mill was sticking to €600 per tonne ex-works.
Rare transactions were heard done at €560-570 per tonne ex-works in Northern Europe.
Some suppliers were undercutting that mark, but for large tonnages, Fastmarkets heard.
Notably, several sources reported transactions done at €530-540 per tonne ex-works from one integrated supplier for large volumes of HRC, but they pointed out that those were rather “special deals with special customers,” and that such low prices were not widely available in the spot market.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €566.25 per tonne on Friday, down by €4.81 per tonne from €571.06 per tonne on Tuesday September 12.
This is the lowest mark since December 2020.
The index was down by €14.50 per tonne week on week and by €50.00 per tonne month on month.
Meanwhile, in Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €570.00 per tonne on Friday, down by €0.63 per tonne from €570.63 per tonne on the previous day.
The Italian index was down by €10.24 per tonne week on week and by €45.00 per tonne month on month.
HRC offer prices from domestic suppliers were heard around €585-590 per tonne delivered, which nets back to about €575-580 per tonne ex-works.
Lead times were about four to six weeks, sources said.
Bids for such material were reported at €550-560 per tonne ex-works, but domestic suppliers were heard to be rejecting bids on the lower end of the range.
Trading was also quiet in Italy. Expectations have been bearish due to poor end-user demand, oversupply and the price downtrend in raw materials, Fastmarkets understands.
Meanwhile, the import HRC market was also slow because of a small gap between import and domestic prices, as well as trade defense measures in the European Union.
Turkish HRC was offered to Italy at €550 per tonne CFR, including the anti-dumping duty, sources said.
Asia-origin coil was reportedly on offer at €540-550 per tonne CFR.
HRC from India was heard offered to Italy at $600-620 per tonne CFR, depending on the supplier.
Most overseas suppliers were reportedly offering shipment on end-October to early November, which means January arrival.
European HRC market remains stable amid muted activity
Domestic prices for European hot-rolled coil remained stable on Sept. 12, on muted market activity as buyers remained cautious amid expectations of further decreases in prices later in the year.
Additionally, prices seemed to be experiencing more of a downward pressure within Northern Europe amid worsening macroeconomic factors, while Southern Europe remains relatively stable, sources said.
“Booking prices dropping further down,” a distributor source said. “Seems Southern Europe is doing better than Northern Europe right now.”
Sources noted that many consumers were holding off buying any more material in the hopes that prices continued to become more favorable towards the end of the year. Additionally, inventory levels remained high, further dampening demand for domestic material.
“We need to follow booking prices carefully,” the distributor source said. “Customers are still looking where prices are bottoming.”
Platts assessed Northwest European HRC at Eur565/mt ex-works Ruhr on Sept. 12, stable on the day
Offers were reported at Eur570/mt EXW Ruhr.
Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur570/mt EXW Italy, stable on the day.
Tradable values were reported at Eur570-575/mt EXW Italy.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur559/mt CIF Antwerp and imported HRC in Southern Europe stable on the day at Eur555/mt CIF Italy.
Regarding green steel, prices in Europe continued to fluctuate, particularly as consumers were hesitant to purchase new material at a premium compared to conventional steel.
Faced with the existing pressure in the coils market, green steel has also struggled to attract the necessary demand, especially for the automotive industry, which is facing increasing costs and a lull in demand. As a result, prices for green steel could differ significantly.
“The exact premiums can vary,” the distributor source said. “[It can be] based on demand and regional factors.”
Platts assessed carbon-accounted HRC Ruhr at Eur660/mt EXW Ruhr, stable on the day.
Geraint Moody | Devbrat Saha
Northwest European coil market deems price hike unlikely
Despite efforts by mills last month to bring coil prices up somewhat, the prices paid on the market have, in fact, continued retreating.
Some European mills were trying to increase their prices by €20-30/tonne ($22-33), “but in reality, prices are getting more and more downward pressure. There is still too much material around, and demand is not in balance with supply,” a buyer at a Dutch steel user tells Kallanish. “I do not see any clear signals that the European market will improve in the next weeks.”
Transactions are now frequently undercutting the mark of €600/tonne ($667) for hot rolled coil. Another Dutch source assesses the range of spot market prices within the EU for HRC, at between €580/t and €620/t, “depending on volumes, region, quoting mills and desired lead time”, he points out.
Lead times can be extraordinarily short these days. “Four to six weeks is possible, but even sooner if required,” the Dutch buyer says. He expresses sympathy for the mills’ ongoing suffering and notes they are very accommodating as they are vying for the sparse order volume on the market.
Meanwhile, a Belgium-based trader tells of comments he hears from Poland. Customers there are even expecting that mills will lower their prices for October. It is not quite clear if that would apply to Polish/Central European mills, or also to close-by German mills. “But I am sure that will not be their [mills’] official statement,” the trader says.
Christian Koehl Germany
European HRC prices inch down amid downward pressure, weak fundamentals
Domestic prices for European hot-rolled coil fell slightly Aug. 30, amid downward pressure and weak market fundamentals.
“Prices are under a lot of pressure,” a distributor source said. “There have been no changes from stockholders and end-users.”
“Market is still quiet,” a trader source said. “And there is a lot of uncertainty as well.”
Sources noted that some change is expected in the coming weeks, but the direction of the market remains unclear, with some expecting prices to fall by as much as Eur50 by the end of the year.
Others have continued suggesting that it remains down to the supply-side of the industry to reduce capacities to boost price recovery.
“Saw a little more activity,” the trader source said. “Expected to see change since all companies are back [from holidays].”
“Activity will not be better, demand will be low,” the distributor source said. “Need to see changes from the supply side, otherwise prices will fall further.”
Furthermore, the European Commission antidumping investigation continues to loom over the market, with some market participants fearing that in the long term there may be supply issues once consumers start avoiding the export countries in question. Some market sources are speculating that Turkey may remain the best alternative option to fill the gap in the market.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur559/mt CIF Antwerp.
Platts assessed Northwest European HRC at Eur590/mt ex-works Ruhr Aug. 30, down Eur5 on the day.
Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur590/mt ex-works Italy Aug. 30, down Eur5 on the day.
European HRC market remains quiet amid holidays; slow demand clouds expectations
Trading has paused in the European HRC market amid due to the summer vacation, with both buyers and sellers remaining on sidelines.
“The market is on a stand-by mode. There will be no real changes until the end of August, early September, when everyone is back,” a buyer source said.
Firm offers were rare in the past couple of weeks.
One supplier in Northern Europe was reportedly aiming for €650-660 ($710-721) per tonne ex-works for October-delivery HRC.
This was above indications of tradeable levels from buyers, however, which came in at €600-620 per tonne ex-works.
Sources suggested that restocking in September might provide some limited support to domestic HRC prices, but subdued real demand would not allow for a strong rebound.
“Apparently, we will see some restocking after summer holidays, and buyers will likely try to source more [HRC] domestically, considering all trade restriction we have in place. But restocking alone is not enough for a sustainable [HRC] price recovery,” a second buyer said.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €616.25 per tonne on Tuesday, down by €3.75 per tonne from €620.00 per tonne on Monday August 12.
The index was down by €3.75 per tonne week on week and by €15.88 per tonne month on month.
In Southern Europe, meanwhile, Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was €615.00 per tonne on Tuesday, down by €2.50 per tonne from €617.50 per tonne on the previous day.
The index was down by €5.00 per tonne week on week and by €11.00 per tonne month on month.
The Italian market was also quiet because of the holidays.
Buyers estimated workable prices at €600-620 per tonne ex-works. No firm offers were reported on Tuesday.
“Mills have begun maintenance period. New [HRC] offers will be announced in a couple of weeks,” a third buyer in Europe said.
The market for imported coil was also largely quiet after news about the European Commission’s anti-dumping (AD) probe against HRC from Vietnam, India, Japan and Egypt emerged last week.
A buyer source said offers from Vietnam and India ranged €560-575 per tonne CFR.
Several sources said there was an offer from a Japanese supplier at €580 per tonne CFR to Southern Europe for October-shipment HRC.
Sources reported that several suppliers from the four countries affected by the probe said they would continue to offer HRC to Europe until the results of the investigation are announced.
October-shipment HRC from Turkish mills was offered at €570-590 per tonne CFR, including duty.
