There was limited trading in the European hot-rolled coil market on Tuesday November 22, with restocking only likely to be seen in the first quarter of 2023, sources told Fastmarkets
Fastmarkets assessed its daily steel hot-rolled coil index, domestic, ex-works Northern Europe, at €622.75 ($638.82) per tonne on Tuesday, down by €2.04 per tonne from €624.79 per tonne a day earlier.
The latest calculation of the index is down by €7.25 per tonne week on week, and down by €42.25 per tonne month on month.
Offers and tradeable values for December- and January-rolling HRC were reported by mills and buyers at €620-630 per tonne EXW in the region.
Some unconfirmed deals were heard at €600 per tonne EXW in Germany.
European producers still had December-rolling coil to sell, market sources said.
But one producer source said that they had sold some tonnages of January-rolling HRC in the Benelux area, but volumes were small.
“We are mainly seeing back-to-back business these days, and it is not likely to change before year-end,” the mill source said.
Stockholders and distributors continued to compete with one another in the secondary market to sell off their expensive stock and therefore were not actively restocking.
Furthermore, buyers would like to restock once HRC prices reach a bottom, and there was no clarity on whether prices had achieved that yet. In fact, some market sources said they still expected to see a downward correction in HRC prices during the fourth quarter.
For their part, producers were a little more optimistic and said prices would likely hold steady throughout the rest of this year.
“We have seen some increase in inquiries from buyers lately; of course, the volumes are not booming, but it is a nice change after weeks of silence,” a second mill source said.
The second mill source added that producers were trying to increase prices for first quarter-rolling coil, but the market fundamentals still seem to be too weak for that.
Fastmarkets’ assessment of the daily steel hot-rolled coil index, domestic, exw Italy, was €592.50 per tonne on Tuesday, down by €7.50 per tonne from €600.00 per tonne on Monday.
The Italian index is down by €28.13 per tonne week on week, and down by €90.00 per tonne month on month.
It is the first time since December 2020 that the index has fallen below $600 per tonne EXW, according to Fastmarkets’ data.
One mill in Italy was heard selling HRC at €600-620 per tonne delivered (€580-590 per tonne EXW) during the week.
Some buyers came back to the market to book HRC at those prices, but in general traded volumes remained rather low, sources said.
Market sources said that current transaction prices in Italy were already very close to the cost line, which they estimated to be €550 per tonne for HRC.
Overseas suppliers were not competitive compared to domestic EU mills, given the long lead times and small gap between prices.
In fact, the latest offers from Southeast Asian suppliers were heard at €570-585 per tonne CFR Italy for March delivery.
“There is no point in booking import material and waiting for several months, while the European mills can supply HRC in four weeks at almost the same price,” the trading source in Italy said.
Published by: Julia Bolotova