Activity remains weak in EU HRC market, with some mills giving discounts
Trading activity in the European hot-rolled coil market remained slow May 29, while the majority of steelmakers have held offers stable, though some were ready to give discounts for coil with higher added value.
“Transactional volumes are limited,” a service center source said. “The buyers are just filling the gaps in their stocks when absolutely needed.”
According to a mill source, “European distributors have been avoiding booking of larger volumes as they remained uncertain of the price trend and demand.”
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up by Eur5/mt on the day to Eur630/mt ex-works Ruhr May 29.
Deals for smaller lots have been heard at Eur630/mt ex-works Ruhr and tradable values at Eur630-640/mt ex-works Ruhr.
Offers have been reported at Eur650-660/mt delivered Germany, and for commodity grades the price is equivalent to Eur630-640/mt ex-works Ruhr. A German mill, however, has been offering HRC with higher added value, therefore with higher premiums, at the same prices on delivered basis, making it the equivalent of Eur615-620/mt ex-works Ruhr.
The market mood has been slightly better in the South Europe compared to Germany due to reduced domestic supply caused by stoppages at Acciaierie d’Italia, sources said.
Platts assessed domestic prices for hot-rolled coil in South Europe stable on the day at Eur625/mt ex-works Italy May 29.
Offers have been heard at Eur635/mt ex-works Italy, and buyers’ tradable values were not accepted by mills at Eur615-625/mt ex-works Italy.
Interest in imported material from Asia has been low due to long lead times, sources said.
“Offers from Asia are out of question due to long lead times — the material would be custom cleared in the fourth quarter, and we still do not know what would be the changes in the safeguard measures,” another service center said. “European mills understand that the buyers will have to turn to them for volumes and avoid moving prices down.”
Offers of HRC from Egypt and from Turkey, including antidumping duties, were at Eur610-615/mt CIF Italy.
EC implements 15pc cap on HRC other countries quota
The European Commission is implementing a 15pc cap on any individual country selling hot-rolled coil into the quarterly other countries quota of its steel safeguard.
This effectively caps any country selling into the other countries at 141,849t/quarter for the rest of this year: the other countries quota for July-September and October-December will be 945,664t.
If no grace period is granted, sources suggest this could lead to significant duties being incurred on 1 July, as many countries will have more than 15pc of the other countries volume in transit to the EU.
The commission decided against any other individual country quotas on HRC, the notification said.
The commission has been carrying out its review of the steel safeguard for months now. Market sources had anticipated Vietnam would get its own quota, while in recent months there have been suggestions Japan actively asked for its own quota.
The liberalisation rate has also been reduced from 4pc to 1pc.
The commission also notified the WTO the safeguard would be extended for two years, meaning there will be a brief six-month overlap between the safeguard and the imposition of the financial component of the carbon border adjustment mechanism (CBAM).
“The commission also established the surge of imports from certain new origins was related to growing overcapacity in certain regions as well as to the significant pressure exerted by a strong increase in Chinese exports to certain markets,” it said in the notification. China has been exporting record volumes of HRC this year, with significant tonnage going into nearby markets, such as Vietnam.
The changes to the safeguard are subject to approval by member states, and the commission will hold consultations from 29 May until June 10 on the proposal.
Slow apparent demand for HRC interferes with European mills’ bullish moves
Offers for July-delivery HRC in Northern Europe were heard at €640-660 ($695-716) per tonne ex-works on Tuesday.
Sources noted, however, that several suppliers could offer prompt delivery for the end of June, indicating weak order books.
“Some suppliers are looking for quick deals for late-June [delivery] So, order books are not really dull due to low demand,” a buyer in Germany said.
Bids and buyers’ estimations of achievable prices were heard at €620-640 per tonne ex-works.
“We are trying to book HRC for July delivery at €620-630 [per tonne ex-works],” a second buyer in the region said.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €636.50 ($690.83) per tonne on Tuesday, down by €0.87 per tonne from the previous calculation at €637.37 per tonne on May 24.
Fastmarkets’ European HRC indices were not published on Monday because of the Spring Bank Holiday in the UK.
The index was down by €2.25 per tonne week on week, but up by €6.08 per tonne month on month.
Import offers were reported at €620 per tonne CFR Antwerp from Egypt and at the same level from Turkey, including the anti-dumping duty.
Fastmarkets’ corresponding daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €630.00 per tonne on Tuesday, unchanged since May 24.
The index was down by €3.75 per tonne week on week, but up by €9.37 per tonne month on month.
In Italy, the spot market was also quiet, and buyers’ stocks were reported to be “high compared to acute trading activity level,” a steel-service center source said.
A local steelmaker was maintaining its offers at €670 per tonne delivered (€660 per tonne ex-works), but transaction prices were still lagging behind offers, with tradeable values heard at €640-650 per tonne delivered (€630-640 per tonne ex-works) for July-delivery HRC.
Bids were reported at €620-630 per tonne ex-works.
Import offers for Asia-origin HRC with mainly August shipment were reported at €600-620 per tonne CFR, with some sources reporting lower values — €580-590 per tonne CFR — for Vietnam-origin HRC.
From Turkey, July-shipment HRC was offered to Italy around €600-610 per tonne CFR, including the anti-dumping duty. Sources reported bookings within the mentioned level to the Iberian market about a week ago.
“Turkish mills have quick shipment and no problems with quotas, so they’ve become very active in Europe lately,” a European buyer said.
European HRC prices hold stable amid muted market activity
Domestic prices for hot-rolled coil in Europe have remained unchanged on May 24, while trading activity in the market remained slow.
End-user demand remained unchanged and was described as “normal” in majority of the EU countries, except for Germany, according to market participants.
“End-user demand is ok in Europe, except for Germany,” a service center said. “Germany is the most important industrial market in Europe, and it is like an engine with some problem that needs to be fixed before it gets worse.”
Apparent demand, in the meantime, remained low as the spot buyers have been avoiding restocking of bigger lots due to uncertain outlook for the second half of the year.
“The market is quite depressing, and nobody wants to commit to purchases of bigger volumes,” a distributor said.
Market participants believe that the steelmakers would take longer pauses in production for maintenances during the summer season to reduce output and help price recovery in the third quarter.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe stable on the day at Eur635/mt ex-works Ruhr on May 24.
Deals have been reported at Eur630-640/mt ex-works Ruhr.
Tradable values have been heard at Eur620-640/mt ex-works Ruhr and offers at Eur630-640/mt ex-works Ruhr.
Platts assessed domestic prices for hot-rolled coil in South Europe at Eur625/mt ex-works Italy on May 24, stable on the day.
Tradable values have been reported at Eur620-630/mt ex-works Italy and offers at the equivalent of Eur610-630/mt ex-works Italy.
Interest in imported HRC from Asia was limited due to longer lead times, uncompetitive prices and risks related to possible changes in the safeguard measures after a review that is scheduled to end by June 30.
Offers of HRC from Asia have been reported at Eur580-610/mt CIF Italy and from Turkey at Eur610-630/mt CIF Italy, including antidumping duties.
European HRC prices fairly stable as trading activity remans muted
Trading activity in the European hot-rolled coil market remained low on May 17 and prices remained fairly stable.
Real demand has remained low, and distributors have been avoiding building stocks, focusing on purchases of volumes needed to fill gaps in their portfolios.
Despite limited trading activity, market sources believe that prices would remain stable in the short run.
“The market is very quiet. Demand from every end-user segment is low and distributors avoid bookings,” a German service center said. “I do not think that the prices would decline as the mills understand that the lower prices would not drive sales up.”
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up Eur5/mt on the day at Eur635/mt ex-works Ruhr on May 17.
Deals were reported at Eur630-640/mt ex-works Ruhr.
Tradable values have been reported at Eur630/mt ex-works Ruhr.
The lowest offers were reported at Eur630-640/mt ex-works Ruhr.
Platts assessed domestic prices for hot-rolled coil in South Europe at Eur625/mt ex-works Italy on May 17, unchanged on the day.
Tradable values have been reported at Eur620-630/mt ex-works Italy and offers at the equivalent of Eur640/mt ex-works Italy.
Interest in imported HRC from Asia was limited due to longer lead times, uncompetitive prices and risks related to possible changes in the safeguard measures after a review that is scheduled to end by June 30.
The lowest offers from Turkey were reported at Eur620/mt CIF Italy, including anti-dumping duties, and offers from Asia were heard at Eur610-630/mt CIF Italy.
Maria Tanatar | Devbrat Saha
UK HRC market sentiment bearish on low demand
Domestic prices for hot-rolled coil in the UK fell in the week ended May 16 as trading activity remained low and distributors started to offload ex-stock material at competitive prices.
Atlantic Steel Processing, a flat steel service center and stockholder, went into administration on May 14, according to official government data. Market sources said that this will result in significant tonnages going around and prices are expected to be lower in the coming weeks.
“Atlantic steel went into administration, so the cargo has to go somewhere,” a trader source said. “Spot prices are expected to be lower because of this for the next 2-3 weeks.”
Atlantic Steel typically has up to 10,000 mt of flat steel in the warehouse, and further 10,000 mt in ports, according to the company’s website.
Steelmakers have been struggling to fill order books as buyers were holding back from bookings. Sources also said that no significant improvement in demand is expected until next year.
“The market is still very quiet,” a service center source said. “EU mills are hungry for orders.”
Additionally, the bearish mood in the market was supported by competitive stocks of local distributors offering European hot-rolled coil at GBP580-600/mt ex-stock West Midlands.
For new EU-origin material, offers and tradable values were reported at GBP610-620/mt DDP West Midlands.
For material originating from Vietnam, offers were reported at GBP590-600/mt DDP West Midlands, while tradable values were reported at GBP580-585/mt DDP West Midlands.
For material originating from Turkey, offers and tradable values were reported at GBP590-610/mt DDP West Midlands.
Platts assessed UK HRC down GBP5/mt on the day at GBP605/mt basis DDP West Midlands May 16.
For the “other countries” UK HRC category, mainly including material from Asia, 89% of the total quota — which is 22,589 mt — has already been used, according to official UK government data.
Platts is part of S&P Global Commodity Insights.
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
