EUROPE HRC WRAP: Domestic prices slide further in north on low demand

Domestic prices for hot-rolled coil in Northern Europe dropped further during the week to Friday May 22, due to low trading activity.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €407.50 ($443.92) per tonne on Friday, down by €4.38 per tonne week on week and down by €37.50 per tonne month on month.

Friday’s index was calculated based on deals and “workable” prices heard at €400-410 per tonne ex-works as well as offers reported at €405-415 per tonne ex-works.

Fastmarkets’ corresponding weekly price assessment for steel HRC, domestic, exw Southern Europe, was €380-390 per tonne on May 20, compared with €380-395 per tonne a week earlier.

Demand for HRC has been weak due to a combination of sufficient stocks among distributors and low demand from end-users, particularly the automotive industry.

Sales of passenger cars in Europe dropped by 76.32% year-on-year in April 2020, making it the fourth consecutive month to show a decline.

In addition, buyers have been showing little interest in importing HRC due to an expected cut in the EU’s permitted import quotas.

The European steel association, Eurofer, has requested a 75% cut to the quotas, but market sources expected the quotas to be reduced by about 50%. Any decisions that emerge from the current review will come into force on June 30.

The lead times have been getting shorter, market sources said. The region’s steelmakers have been offering June-rolling HRC.

Since production cuts have not been enough to balance supply and demand in Northern Europe, mills have been rolling some volumes for stock, according to market sources.

Earlier this week, German industrial group Thyssenkrupp detailed its restructuring plan, confirming plans to sell shares in its steel business and to sell or close its heavy plate sites. The heavy plate sector in Europe has been described as “the worst performing” by several market participants.

The situation in the market deteriorated further after the Covid-19 pandemic started. Thyssenkrupp has not stopped any equipment but it introduced shorter working hours due to reduced demand for flat steel across Europe.

In Northern Europe, Swedish steelmaker SSAB has decided to extend temporary layoffs at sites in Finland following further deterioration in the flat steel markets in Europe.

At its Swedish units, SSAB has decided to extend short-time work allowances. The company did not provide any figures concerning the effects on output that could be expected from these measures.

And Dutch trade union FNV Metaal warned that the departure of the chief executive officer of Tata Steel Netherlands, Theo Henrar, will ultimately result in job losses at the company’s operations in the country.


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