Trading remains limited in European HRC market, prices stable to slightly weaker

European hot-rolled coil prices remained broadly flat on Wednesday September 14 despite producers pushing for higher levels, with high inventories held by buyers and weak demand from end-user sectors remaining key issues, market sources told Fastmarkets.
European HRC buyers continued to maintain a wait-and-see attitude with only small tonnages being traded in the spot market recently, sources added.

In fact, several large stockholders told Fastmarkets that they can postpone restocking for several week because their inventories were still rather high, while the order intake from end users was quite low.

For their part, producers have been trying to secure price increases since the beginning of September on account of high costs, but poor demand has been constraining price growth.

“The current [offer] prices are not working; buyers refuse to pay it, they simply wouldn’t be able to pass the increase downstream,” a steel trading source in Germany said.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €763.33 ($768.79) per tonne on Wednesday, down by just €1.67 per tonne from €765.00 per tonne on Tuesday.

The latest calculation of the index is down by €6.67 week on week and by €10.84 per tonne month on month.

Offers for HRC from the mills in the region were still reported at €800-850 per tonne exw, but those levels were not sealed in deals, market sources said.

A transaction for a small volume of HRC in the region was reported at €770 per tonne exw on Wednesday, sources added.

An integrated mill in the region secured a sale of a small tonnage of high-strength HRC at €830 per tonne exw earlier this week, but the price was not representative since the transaction was done for a special grade, according to sources.

In fact, most buyers estimated a tradeable level for HRC in the region at €750-770 per tonne exw, with some transaction for minor volumes reported within that range in Germany.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, was €751.25 per tonne on Wednesday, down by €6.25 per tonne from €757.50 per tonne on Tuesday.

The latest calculation of the Italian index is down by €10.42 per tonne week on week and by €18.75 per tonne month on month.

HRC offers from the local mills were heard at around €800 per tonne exw, while buyers’ estimates of achievable prices were heard at €750-780 per tonne exw, depending on a tonnage.

Mills sources, however, said that an HRC price of €750 per tonne exw was actually below costs for them.

But Italian buyers were largely not interested in domestic HRC bookings and were looking for imported alternatives instead, market sources said.

Most stockholders were now looking to restock for the first quarter of 2023 and therefore were looking at offers from Asian suppliers.

“We do not need material for 2022, so we are checking on import with lead times in January-February,” a major buyer in Italy told Fastmarkets.

Last week, a small HRC tonnage from South Korea was booked to Italy at €700 per tonne cfr.

Sources said that some HRC offers from Asia were still available at €680 per tonne cfr, but for large tonnages.

Turkey-origin HRC was offered to Italy at €720-730 per tonne cfr, but the sellers were reportedly ready to consider bids of €700 per tonne cfr.

However, Turkish suppliers were offering HRC with delivery at the end of the fourth quarter, while most buyers were looking to restock for the first quarter of next year, sources said.

“It is risky to book something with delivery at the end of the quota period,” a second buyer in Italy said, referring to the end of EU safeguard quarterly quotas.

Published by: Julia Bolotova