EUROPE HRC: Domestic prices largely stable, market mood still positive

Domestic prices for hot-rolled coil in Northern Europe have been largely unchanged day on day and sentiment in the market remains positive, sources told Fastmarkets on Thursday December 12.

Domestic prices have been supported by combination of reduced output from European mills, a lack of competitive import offers and some demand recovery.

Fastmarkets’ daily steel hot-rolled coil index domestic, ex-works Northern Europe, was €432.08 ($479.45) per tonne on December 12, slightly down from €432.65 per tonne on Wednesday.

The assessment is based on “workable” prices and deals for smaller volumes of the material at €430-435 per tonne ex-works.

Official offers have been heard at €440-450 per tonne ex-works.

A number of European mills, including ArcelorMittal and Salzgitter in Germany, SSAB in Sweden and Arvedi in Italy have announced equipment stoppages to balance supply and demand. Other steelmakers were also managing coil product output to meet demand, sources said.

The latest deals for imported HRC in Northern Europe have been heard at €440 per tonne cfr Antwerp, and no import material was available at lower prices, according to market participants. 

Demand for HRC was higher across Europe this week, mainly driven by re-stocking activity. But interest in non-EU material has been limited by the higher prices, sources told Fastmarkets. Other market participants added that, because most buyers secured deals earlier this quarter, when prices were lower, buying activity will remain slow.

European steelmakers remain in negotiations with buyers for the first half of 2020 contracts, but while mills are targeting a decrease of about €30 per tonne, compared with the second quarter of this year, the buyers are looking for a drop of €50-60 per tonne.

Fastmarkets’ price assessment for HRC averaged €455.59 per tonne from July to the first week of December 2019 (when Fastmarkets converted the assessment to an index), down by €55 per tonne compared with the average price in the first half of the year. 

Steelmakers have claimed that, because demand has recovered, the long-term contracts should be settled with a smaller drop when compared to spot prices, according to market sources.

Meanwhile, domestic prices in Southern Europe jumped this week, driven by a rise in import offers and growing uncertainty over ArcelorMittal Italia.

Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, ex-works Southern Europe, was €420-430 per tonne on December 11, up by €5-10 per tonne from €415-420 per tonne.

The assessment reflects “workable” prices heard in the market, with steelmakers targeting €440-450 per tonne ex-works, making the official offers in the south similar to those in Northern Europe.