Trading limited in European HRC market, higher offers expected

The standstill in the European hot-rolled coil market continued on Thursday March 30, with mills imminently expected to increase their official offers, while buyers continue to question the viability of the uptrend beyond the second quarter, sources told Fastmarkets.
The Northern European market was mostly quiet on Thursday, with little to no trading reported.

Nonetheless, producers in the region are expected to increase their offer prices on account of having good order books and limited steel supplies.

Offers from integrated mills in Northern Europe were expected to rise from €850-870 ($921-943) per tonne EXW to €900 per tonne EXW for June-July delivery HRC

Buyers, however, still do not see any justification for such price rises, citing insufficient end-user demand.

“The new [HRC] increases will be made to help mills consolidate their previous price levels,” a distributor in the region said.

Some buyers continued to put the workable price at about €820-840 per tonne EXW, and said they expect prices to fall in summer.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €847.63 ($918.87) per tonne on Thursday, up by €3.88 per tonne from €843.75 per tonne on Wednesday March 29.

The latest calculation of the index was also up by €0.34 per tonne week on week and up by €53.88 per tonne month on month.

The HRC market in Italy, meanwhile, was also broadly quiet – although producer sentiment is becoming increasingly bullish, given the reduced supplies.

But sources said that apparent consumption has been really weak in the country recently, because buyers prefer to only make hand-to-mouth bookings in the domestic market, while big stockholders were looking for imports.

“The market is pausing trying to understand direction [of HRC prices],” a trading source in Italy said.

Offers from domestic producers were heard at around €850-860 per tonne EXW for June delivery, while buyer estimates of achievable prices were closer to €820-830 per tonne EXW. Producers said that level was not acceptable for them.

The calculation of Fastmarkets’ daily steel HRC index, domestic, exw Italy, was €835.38 per tonne on Thursday, edging up by €5.80 per tonne from €829.58 per tonne on Wednesday.

The latest calculation of the index was up by €12.88 per tonne week on week and by €50.38 per tonne month on month.

Major buyers in Italy were looking to procure overseas HRC, despite safeguard-related risks and long lead times, Fastmarkets understands.

One Indian producer was offering June shipment HRC to Italy at €750 per tonne CFR. And HRC from Vietnam and South Korea was on offer at €770 per tonne CFR.

Japan-origin coil was on offer at $830-840 per tonne CFR for June shipment, with deals for some limited lots reported within that range.

Sources, however, said the proportion of imports in Italy’s total HRC consumption was likely to remain insignificant compared with the local mills’ market share.

Published by: Julia Bolotova