Domestic European hot-rolled coil prices remained largely unchanged Aug. 1 as weak market fundamentals persisted, with market sources remaining uncertain about the future price outlook.
Some sources noted that prices cannot go down any further, as mills are operating at break-even or tight margins, depending on the type of furnace used.
“I don’t think prices can go below [Eur600[/mt,” a service center source said.
According to market sources, the strain and volatility experienced in the HRC sector is not a surprise, particularly as sluggish demand in the European automotive industry and competitive Chinese automotive exports weigh on the market.
Sources said European mills may see some more stability and certainty in specialized coils, such as hot-dipped galvanized, where product quality remains higher than alternatives available in Asia.
Furthermore, the future of the automotive industry will depend on the level of support and legislation implemented from the European Commission, which could take the form of tax cuts or subsidies, sources said.
“You need incentives,” a service center source said.
Platts assessed Northwest European HRC at Eur620/mt ex-works Ruhr Aug. 1, stable with July 31.
Tradable values were reported at Eur620-640/mt EXW Ruhr.
Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur620/mt EXW Italy Aug. 1, stable with July 31.
