Trade remains ‘frozen’ in European CRC, HDG markets; outlook bleak

Subdued demand from key end-user sectors – including the automotive industry – and high stocks at buyers has kept trade at a minimum in the cold-rolled and hot-dipped galvanized coil markets across Europe, sources said.
There was a substantial gap between mills’ official offers and buyers’ estimations of achievable prices. Sources said the key reasons were weak demand from end-user sectors, competitive imports and surging production costs.

Therefore, European producers were holding back from giving firm indications for CRC and HDG coil recently, amid weak buying activity.

“It does not matter what the price is; there is absolutely no demand. Buyers are not interested in bookings,” a Northern European trading source said.

“Stocks are still high, while demand is low. More and more end-users are [reducing work hours] and cutting output,” another source said.

Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €830-850 ($822-842) per tonne on Wednesday October 5, stable week-on week.

Rare offers were reported at €850-870 per tonne exw in Italy, while buyers’ price ideas did not exceed €830 per tonne exw.

Some producers have even withdrawn offers from the market.

“The costs of annealing [a heat treatment during the cold-rolling process] are very high, so our margins in the CRC segment are squeezed. The price should be over €900 [per tonne exw], but it is not possible for the time being,” one mill source said.

On top of the existing supply-demand imbalances, CRC prices in Southern Europe were under pressure from competitive import offers, sources said.

Market participants said, a supplier from South Korea has reduced its CRC offer price to Italy from €780 per tonne cfr last week to €760 per tonne cfr this week.

Offers from other suppliers in Southeast Asia were heard at €770-810 per tonne cfr Italy.

Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Southern Europe was €870-890 per tonne on October 5, stable week on week.

The assessment was based on lower end of offers and higher end of buyer’s estimations of achievable prices.

Transactions were rare in the market, because Italian buyers had high stocks and preferred to hold back from trading.

Some offers from Southeast Asia of 0.5mm HDG were reported at €930-940 per tonne cfr for early-first-quarter delivery. That price, however, was not considered workable by buyers.

Published by: Julia Bolotova