EUROPE HRC: Domestic prices to remain stable in north, sources say

Domestic prices for hot-rolled coil in Northern Europe were expected to remain largely stable over the week, supported by a lack of competitive import offers and good order books at domestic steelmakers, market sources told Fastmarkets on Wednesday March 4.

Fastmarkets’ daily steel hot-rolled coil index, domestic, ex-works Northern Europe, was €484.55 ($540.04) per tonne on March 4, up by only €0.02 per tonne day on day from €484.53 per tonne on March 3 and back to the same value as at the start of the week.

The index was calculated based on deals and achievable prices heard in the range of €475-490 per tonne ex-works.

Some deals for smaller tonnages of material with higher extras for steel grades and other product parameters were reported at €500 per tonne ex-works.

Domestic prices were expected to remain stable, with buyers mainly purchasing only enough material to maintain their stock levels, market sources said.

Northern European distributors were expected to remain in “wait-and-see” mode until the consequences of the outbreak of the 2019-nCoV coronavirus in northern Italy become clear, and any new import offers, particularly from Turkey, appear in the market.

In the meantime, domestic prices have been supported by a combination of good order books and a lack of competitive import offers, market sources said. Mills claimed to be trading for May-June shipments.

Although the Northern European buyers have been showing almost no interest in imported HRC, the demand for overseas material might strengthen if lead times from domestic suppliers extend further and buyers turn to imports, according to market sources.

“If lead times at domestic suppliers slip away, which is the case at the moment, buyers might return to imports soon,” a Northern European trader said.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Northern Europe, was stable week on week at €480-485 per tonne on March 4. The assessment was based on “achievable” prices heard in the market.

Late last week, HRC from Russia became available at €495 per tonne fca Antwerp, including a fixed anti-dumping duty of €17.60 per tonne, according to market sources. This compared with €455 per tonne cfr Antwerp offered by the same steelmakers in the middle of February.

Some market sources said that some traditional non-EU suppliers of HRC to Northern Europe, including India and South Korea, have been less active in the EU market because they have focused more on trading in the Asian market.

“Some [overseas] mills are currently filling the gap created in the Asian markets due to the cuts in Chinese production [while the country acts to contain the outbreak of] coronavirus,” a Northern European distributor said.

The euro-dollar exchange rate could also support a recovery in demand for imported steel, market sources said. The euro has gained by 2.63% against the dollar week-on-week, according to exchange rate service Oanda. It was trading at €1 to $1.115 on March 4, compared with €1 to $1.086 on February 26.

Southern Europe
Fastmarkets’ weekly price assessment for steel HRC, domestic, ex-works Southern Europe, was €440-450 per tonne on March 4, compared with €435-450 per tonne a week earlier. The assessment was based on deals heard in the market.

Official offers from Italian mills have been heard at €460-470 per tonne ex-works.

Demand in Italy was expected to recover in the second half of March because domestic distributors have low stocks and will need to purchase substantial volumes in a couple of weeks’ time. This anticipated revival in demand was expected to support a domestic price rise, market sources said.

Meanwhile, the coronavirus outbreak has had only a minimal effect on steel production and deliveries in Italy as yet, but market sources were concerned that if the situation were to escalate it could result in disruptions to deliveries, so they were cautious about making new deals.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe, was €460-475 per tonne on March 4, compared with €470-480 per tonne ex-works a week before.

Turkish HRC was reported to be available in Italy at €470 per tonne cfr. Big-volume buyers also claimed that they could achieve prices of €450-460 per tonne cfr for material from Turkey and South Korea.

Turkish mills have been offering HRC to Spain at €485 per tonne cfr, with deals heard at that price in the middle of last week.

Offers of Taiwan-origin HRC were heard at €460-465 per tonne cfr Southern European ports, and a supplier from Egypt has been offering the material at $520-525 per tonne cfr.

Japan-origin coil has been offered to Spain at €475 per tonne cfr.