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Fastmarkets’ daily steel hot-rolled coil index, domestic, ex-works Northern Europe, was €475.91 ($525.88) per tonne on Wednesday, down by €3.81 per tonne day on day from €479.72 per tonne a day earlier.
The index was based on deals heard at €470-480 per tonne ex-works. Bids for material and “workable” estimates of the price were heard at €460-470 per tonne ex-works.
Despite the decrease, European producers believed that the market trend remained positive and that deals could be concluded at €500 per tonne ex-works soon.
Fastmarkets’ daily Northern Europe HRC index has risen by €8.83 per tonne week on week and by €36.74 per tonne since the beginning of January.
At the end of last week and earlier this week, deals were heard at €490 per tonne ex-works, but buyers were no longer willing to pay this price due to the high risks related to a long lead time.
Northern European steelmakers have been offering HRC for shipment in late April or May due to the effects of production cuts, which include long lead times. A number of capacity cuts in the second half of last year have not yet been reversed in the Northern European market, and further production cuts have been announced in Belgium this year.
And while the available output allowed for an increase in prices, market participants believed that the rise might have been too fast. They would prefer to buy smaller tonnages of material to maintain their stocks, according to market sources, because they are uncertain whether the upward trend will persist into the second quarter.
“Buyers are cautious about buying big volumes in the long term,” a trader said.
“Some buyers still have high stocks, and they are not in a hurry to buy. Buyers generally feel that the prices have been growing at high pace and this did not reflect the actual market price,” a Northern European producer said.
“But the trend remains positive and I think €500 per tonne ex-works will be achieved for June-rolling coil,” he added.
In the meantime, the lack of competitive import offers has been supporting domestic prices.
Fastmarkets’ weekly price assessment for steel hot-rolled coil, import, cfr main port Northern Europe, was €470-490 per tonne on February 5, down from €490-500 per tonne a week earlier.
Although import prices have moved, they were still not competitive compared with domestic offers, sources said.
Southern Europe Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, ex-works Southern Europe, was €445-460 per tonne on February 5, down by €5-10 per tonne week on week from €455-465 per tonne.
The assessment was based on deals heard in the market, although the mills have been targeting price rises to around €450-460 per tonne ex-works/delivered, depending on the mill.
Trading sources said that ArcelorMittal Italia was present in the market with limited volumes of material.
“ArcelorMittal is negotiating with authorities [in Italy] in an attempt to find agreement [over the ultimate ownership of the former Ilva steelmaking plant in Taranto] before February 7, when a hearing is scheduled in the Court of Milan for the appeal presented by the commissioners on the disengagement of ArcelorMittal from the site,” an Italian source said.
AM InvestCo, a consortium led by ArcelorMittal for the takeover of the Ilva operations, signed a non-binding agreement with the government-appointed commissioners of the Italian plant in December last year.
The agreement “forms a basis to continue negotiations on a new industrial plan for Ilva, including discussions on a substantial equity investment by a government-controlled entity,” the company said at the time.
Demand for flat steel in Southern Europe has been generally slow, making price rise attempts unrealistic, according to market sources.
Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe, was €470-480 per tonne on February 5, compared with €475-485 per tonne ex-works a week earlier.
The assessment reflected offers of the material from Turkey.