Trading slow in European heavy steel plate market, prices flat on high costs

Steel heavy plate prices in Europe were stable or slightly weaker in the seven days to Wednesday March 13 amid slow trading, and with mills reluctant to cut prices further due to high costs, industry sources have told Fastmarkets.
Trading has remained thin in the Italian heavy plate market, with buyers postponing any restocking activity in expectation of further price drops.

Local re-rollers, however, pointed out that prices for heavy-plate-quality slab, the key feedstock, have remained high. Speculation about a potential export duty on China-origin semi-finished steel persuaded some slab suppliers to withdraw from the market, and the number of offers was limited.

“Only hot-rolled coil-quality slab prices have declined. Plate-quality slab is still expensive at $640-650 [per tonne] CFR, so we cannot be flexible with plate sales,” a mill source in Italy said.

“It’s a tough situation,” a buyer in Italy said. “In the first quarter, re-rollers have still had to produce [plate] from expensive slab, so they are squeezed between high costs and sluggish demand.”

Offers of heavy plate in Italy were reported at €750-760 ($820-830) per tonne ex-works for S275-grade plate, with lead times reported at four weeks.

Tradeable values were heard around €730-750 per tonne ex-works, with occasional transactions for limited volumes reported within the range during the assessment week.

As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €730-750 per tonne on Wednesday, widening downward by €10 per tonne from €740-750 per tonne ex-works seven days earlier.

Overall, trading in the Italian market was weak, and traded volumes remained low, with no restocking in sight. Market sources expected stockholders to come back to the market for limited restocking in the second half of March, but agreed that restocking was unlikely to be “booming.”

“Italian re-rollers have problems finding customers,” a second buyer source in Italy said. “They were selling more to Central Europe recently [specifically, the Czech Republic and Poland] and managed to partially substitute missing tonnages in the region, but even from Central Europe demand has been lower in the past week, with buyers purchasing only what they needed urgently.”

Due to slow demand at home, Italian producers were seeking orders from other European markets, notably Central Europe.

Meanwhile, aggressive import offers were also adding to negative sentiment in the Italian market.

Offers of plate for May shipment from Indonesia to Italy were reported at €640 per tonne CFR during the week, down from €670 per tonne CFR heard in early March.

Suppliers from Indonesia were reported to have significant volumes of heavy plate for June-July arrival, so they were aggressive in the market.

From South Korea, offers were reported at €670-680 per tonne CFR for May-shipment plate.

Northern Europe
In Northern Europe, buyers also preferred to do “hand-to-mouth” bookings to cover their urgent needs and were holding back from restocking.

“For commodity grades, [heavy plate] buyers are only booking minimal quantities and prefer to wait to see how the situation will develop in the next few weeks. The situation for project business in higher grades is better, and some mills are well booked and feel no pressure to cut prices,” a buyer in Germany said.

“Stockholders and steel service centers do not need new [heavy plate] volumes due to dull downstream demand, and prefer to sell [plate] from stock,” a second trader in Germany said.

Plate offer prices from mills in the region were mainly flat week on week, But market sources were not ruling out some downward correction in the short erm, given the downtrend in raw materials prices and sluggish buying.

One German supplier kept its offers of commodity-grade plate at €790-800 per tonne ex-works from one location, and around €840 per tonne ex-works from another location.

Buyers estimated achievable prices at €780-800 per tonne ex-works.

Two sources reported a sale of Libya-origin heavy plate to Germany at €730 per tonne delivered during the assessment week. The specifications and tonnage, however, were not clear at the time of publication. Market sources suggested that the sale involved S235-grade plate

Italy-origin plate was offered to Germany around €800-810 per tonne delivered during the week.

A re-roller in the Benelux area was offering plate to Germany at €800 per tonne ex-works.

A Czech Republic-based re-roller was offering May-June delivery plate at €800-810 per tonne ex-works.

Lead times from Northern European mills were five or six weeks, and around four weeks from Italian re-rollers.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €790-800 per tonne on Wednesday, stable on-week.