The downward price trend in Europe for hot rolled coil and other flat products has bottomed, according to Ukraine-based consultancy GMK Center.
Speaking at Kallanish Flat Steel 2023 in Istanbul on Thursday, GMK chief executive Stanislav Zinchenko stressed that underlying data point towards stability in end-use demand in Europe in the second half of 2023 versus H2 2022.
“We calculate that by the end of the year, end user demand overall in Europe will be marginally higher compared with full year 2022. We have seen a slowdown since July, but we have not seen a dramatic fall,” Zinchenko said.
According to the latest outlook issued by Eurofer in July, EU real steel consumption should grow 0.3% year-on-year in 2023. This outlook could nevertheless be revised downwards in the coming weeks.
Despite the uncertainty, GMK believes the latest price drops in Europe were mainly dictated by import competition. “In October, nevertheless, we see that import offers of HRC in Europe have stopped being competitive; therefore, imports’ negative pressure is easing,” Zinchenko observed. By the end of the year, steelmakers in Europe are expected to try and lift offer prices, he added.
GMK expects HRC prices in Europe to fluctuate in the range of €640-750/tonne in 2024. “With the current raw material costs, we see €640 as the floor for the market,” he noted. This outlook is based on iron ore prices remaining above $105/t and coking coal above $250/t.
According to Kallanish indices, HRC prices in both Italy and northern Europe have been suffering from downward pressure since the beginning of the second quarter. In recent weeks, the market has confirmed the view that prices are near bottom, but a real recovery of transaction levels has not yet materialised.
Emanuele Norsa Italy