EUROPE HRC WRAP: Domestic prices continue to slide on poor demand

Domestic prices for hot-rolled coil in Northern and Southern Europe dropped again during the week to Friday May 15 due to limited trading activity.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe was €411.88 ($445.45) per tonne on Friday May 15, down by €8.95 per tonne week on week and down by €51.45 per tonne month on month.

Friday’s index was calculated based on workable prices and bids heard at €400-410 per tonne ex-works and offers reported at the equivalent of €410-420 per tonne ex-works.

Fastmarkets’ weekly price assessment for steel HRC, domestic, exw Southern Europe was €380-395 per tonne on May 13, compared with €395 per tonne ex-works a week earlier.

Achievable prices for the material in Italy were heard at €380-390 per tonne ex-works, while official offers were heard at €385-410 per tonne ex-works.

Buyers across Europe have been in wait-and-see mode amid expectations that domestic prices will slide further.

Demand for flat steel in Europe has been hit by high stocks at distributors and low capacity utilization rates in coil-consuming industries, such as the automotive sector.

The restart of automotive operations after the easing of Covid-19 lockdowns has not had a significant positive effect on prices or demand so far, according to market sources, because car producers have been operating fewer shifts to maintain health and safety regulations during the pandemic and have themselves been hit by poor demand for vehicles.

Meanwhile, pressure from imports on domestic prices has been limited despite competitive offers. European buyers have been cautious about making new deals for overseas coil due to long lead times and anticipated cuts to import quotas.

The EU safeguard review will come into force by June 30 and is likely to see import quotas cut by as much as 75%.

In addition, last week the European Commission (EC) initiated an anti-dumping case into HRC from Turkey. The EC is scheduled to set provisional measures in the probe by December 15 this year, while definitive measures are scheduled to be announced by June 12 2021.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe was stable week on week at €360-380 per tonne on May 13. The assessment is based on offers heard in the market for material from Turkey, Russia and Asia.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Northern Europe was also unchanged at €370-390 per tonne on Wednesday. The assessment reflects bids and offers heard in the market for material originating from Turkey and Asia.

Production cuts

German steelmaker Salzgitter implemented short-time working at its Flachstahl unit this month to scale back output to match the limited buying activity.

“Currently, the Salzgitter plant is operating at 50-60% of its nameplate capacity. Short-time working has been implemented,” a Salzgitter spokesman said. “In plate and beams, the mills are running at 80-90%.”

ArcelorMittal has postponed temporarily idling blast furnace (BF) No2 at its Fos-sur-Mer plant in France by about a month. Originally, the company planned to stop operations at the furnace and coking plant in June, due to the economic downturn resulting from the Covid-19 pandemic.

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