EUROPE HRC WRAP: Domestic prices slide as buyers resist high prices

Domestic prices for hot-rolled coil in Northern Europe and Italy declined in the week to Friday July 2, with buyers reluctant to continue paying high prices.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €1,149.50 ($1,363.72) per tonne on July 2, down by €41.64 per tonne week on week and down by €0.50 per tonne month on month.

The index was based on deals done at €1,140-1,150 per tonne ex-works, scarce offers heard at €1,150-1,200 per tonne ex-works, and market participants’ indications at €1,100-1,150 per tonne ex-works.

Major producers in the region were reported to be holding back from offering material during the week, sources said.

Fastmarkets calculated the corresponding daily steel HRC index, domestic, exw Italy, at €1,119.52 per tonne on July 2, down by €34.05 per tonne week on week and down by €27.98 per tonne month on month.

Offers for fourth-quarter delivery HRC from local mills were mostly heard at €1,050-1,180 per tonne ex-works, with one producer offering material at €1,200 per tonne ex-works.

Market participants indicated a workable price at €1,100-1,150 per tonne ex-works.

Trading activity was slow because buyers were holding back from making new deals while assessing the market trend. Long lead times from domestic producers, sufficient stocks among buyers for the next couple of months, and exhausted credit lines as a result of high prices for finished steel, all contributed to buyers’ decisions to hold back from making new deals.

Over the past two weeks, limited deals have been heard for small tonnages of HRC, each about 200-300 tonnes. The transactions were mainly made for back-to-back business or to restock a specific material, market sources said.

But prices were unlikely to fall significantly, market sources said. European producers have good order books and were offering HRC from fourth-quarter rolling with no intention of cutting prices.

In addition, due to a combination of scheduled maintenance and technical issues at some plants, availability of domestic HRC was unlikely to increase in the autumn, market sources said.

Interest in imports has been also limited due to the extension of EU safeguard measures for three years until June 30, 2024.

Last week, the UK authorities also announced a continuation of safeguard measures for the same period.

In addition, market participants in Europe expected the European Commission to begin an anti-dumping investigation into imports of HRC from India after a complaint was filed.

The EU customs authority has not released an update on the July-September quota use, but about 381,699 tonnes of HRC from India was awaiting allocation. This volume was substantially above the entire third-quarter quota assigned to suppliers from India at 169,717 tonnes.


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