EUROPE HRC WRAP: Domestic prices in slow rise in north as summer slowdown starts

Domestic prices for steel hot-rolled coil continued to recover in Northern Europe in the week ended Friday July 24, although at a slower pace due to the start of the seasonal market slowdown.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was calculated at €408.21 ($475.69) per tonne on Friday, up by €0.68 per tonne week on week and by €13.84 per tonne month on month.

Friday’s index was based on deals heard at €405-410 per tonne ex-works and “workable” prices reported at €405-425 per tonne ex-works.

Official offers of HRC from the region’s steelmakers were heard at €430-450 per tonne ex-works, but these were not considered workable by buyers. Such high offers, however, indicated the intention of mills to increase prices, market sources said.

Fastmarkets’ corresponding weekly price assessment for steel HRC, domestic, exw Southern Europe, was €390-400 per tonne on July 22, compared with €385-400 per tonne a week earlier.

The assessment was based on achievable prices and deals heard in the market.

Official offers, in the meantime, were heard as high as €420 per tonne ex-works in Italy.

Demand for flat steel has started to decrease across Europe with the region entering its usual period of slow activity in late July and August. This slowdown, however, was unlikely to have any negative effect on prices, market sources believed, adding that when steelmakers and buyers return to re-stock in early September, the producers will continue to push for higher prices.

Demand had been recovering in July after the drop caused by Covid-19 lockdown measures, market sources said. And although it had not reached pre-lockdown levels, the trend was positive.

In addition, domestic HRC prices have been supported by a lack of competitive import offers due to a combination of long lead-times and slower recovery in European prices compared with the global market, which made prices uncompetitive.

In addition, the toughening of existing safeguard measures in the EU that came into force on July 1 this year, combined with the start of anti-dumping and anti-subsidy probes into HRC from Turkey, made buyers more cautious about imports.

The European Commission (EC) replaced yearly quotas for imported HRC with quarterly quotas, making buyers consider delivery times more carefully than before.

Quotas for HRC imports in July-September were unlikely to be filled, market sources believed. The EC’s data showed that 45.50% of the quota for Turkish HRC has been used, according to data available on July 27. Russian suppliers have used only 15.89% of their quota, India 19.40%, South Korea 27.28%, Serbia 23.47%, and other countries had used only 7.43% of their quota.


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