EUROPE HRC WRAP: Sentiment negative on lower automotive demand, competitive imports

The mood in the European hot-rolled coil market was downbeat in the week ended Friday September 10 due to the lower demand from the automotive sector and competitive import offers.

The automotive sector in Europe was reported to be working at reduced rates because of the global shortage of semiconductor chips for onboard electronics. Consequently, market sources expected the industry to consume less HRC.

A major steelmaker in Northern Europe has already redirected small volumes of HRC to the spot market, selling it at low prices, sources said.

Trading activity in the region remained subdued. Buyers were counting on a further decline in HRC prices because of the slower consumption and cheap imports. But producers were comfortably booked until the year-end and therefore saw no reason to reduce their prices.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €1,083.00 ($1,279.02) per tonne on September 10, down by €55.38 per tonne week on week and by €55.75 per tonne month on month.

The index was based on deals heard at €1,150 and €1,040-1,050 per tonne ex-works, achievable prices estimated at €1,070-1,120 per tonne ex-works and an offer reported at €1,030 per tonne ex-works.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy, at €1,010.00 per tonne on September 10, down by €6.00 per tonne week on week and by €18.33 per tonne month on month.

It was based on offers heard at €1,010-1,040 per tonne ex-works and achievable prices indicated at €980-1,010 per tonne ex-works.

Import offers have been heard in a wide range, depending on the origin and the part of Europe where the offer was received.

Despite some lower offers from India, Russia and Turkey, buyers have been cautious. They have already booked substantial volumes and believed that the country-specific quotas for the fourth quarter of this year would be filled almost immediately after the start of the next three-month period in October. As a result, any material ordered now might be subject to a 25% safeguard duty.

Fastmarkets’ price assessment for steel hot-rolled coil, import, cfr main port southern Europe, was €825-875 per tonne on September 8, down by €25 per tonne from $850-900 per tonne a week earlier.

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

Russian suppliers were said to be fairly active in Europe due to low demand in their domestic market and other traditional export markets.

Fastmarkets assessed the price for steel hot-rolled coil, import, cfr main port Northern Europe, at €940-950 per tonne on September 8, down by €10-20 per tonne from €950-970 per tonne on September 1.

The assessment was based on achievable prices estimated by market participants, while official offers have been heard at €970 per tonne cfr.