Uptrend in European HRC market supported by improved apparent demand, reduced supply

Short-term sentiment was cautiously optimistic in the European steel hot-rolled coil markets on Thursday November 16, with price rises gaining support from restocking activity, reduced supply and a lack of competitive import offers, Fastmarkets heard.

In Northern Europe, more buyers have been coming back to the market for restocking in the week to Thursday. Mill sources were also reporting higher numbers of inquiries for HRC tonnages with delivery in the first quarter of 2024.

“The buyers are back, but they are trying to negotiate lower prices,” a distributor in Germany said. “So we have a classic situation — producers’ market versus buyers’ market. However, the chances of achieving the offer prices in deals are quite good, given the improved buying, lower availability domestically and uncompetitive imports.”

Offers of HRC with lead times of six to eight weeks were heard at €680 ($738) per tonne ex-works, and even €700 per tonne ex-works from some suppliers.

A re-roller in the Benelux area was offering January-delivery HRC at €650 per tonne ex-works, up from €620 per tonne ex-works for December.

“Mills are not prepared to negotiate on offers and most buyers believe that domestic prices have bottomed-out,” a steel service center in the region said.

“The range of €650-680 per tonne ex-works [for HRC] sounds reasonable, but demand is still below the normal levels,” a trader in the region said.

A second trading source also pointed out that real demand for steel in Europe was still rather low, so the current uptrend might not be sustained into the first quarter of 2024.

Transactions were reported at €650-660 per tonne ex-works in the region. Also, a sale of January-delivery coil from a Nordic producer was heard at €670 per tonne ex-works on Thursday, but was not confirmed at the time of publication.

Italy-origin coil was offered to Germany at €680-700 per tonne delivered.

As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €655.67 ($712.05) per tonne on November 16, up by €1.54 per tonne compared with €654.13 per tonne a day earlier.

The index was up by €5.07 per tonne week on week and by €40.92 per tonne month on month.

Meanwhile, in Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €633.33 per tonne on November 16, up by €0.83 per tonne from €632.50 per tonne on November 15.

The index was up by €5.41 per tonne week on week and by €38.33 per tonne month on month.

The market was slower in Italy, but local steelmakers were also pushing for higher prices.

Offers of material for first-quarter delivery were heard closer to €680 per tonne delivered (€665 per tonne ex-works), but no trades have been heard at such prices yet.

Tradeable values were estimated by buyers at €630-640 per tonne ex-works.

Import HRC offers were largely stable day on day, with HRC for January shipment from Asia available to European ports at €610-620 per tonne CFR. This would mean arrival in March.

“Asia-origin coil, bought now, will arrive in Europe only in March [2024], and therefore could be customs-cleared only after April 1 [2024] to fit the [European Union’s] safeguarding [quota] allocations. The price gap to European [domestic HRC] is not sufficiently attractive to take such a risk,” a buyer in Italy said.

From India, offers were heard even higher, at €640 per tonne CFR.

Published by: Julia Bolotova