EUROPE HRC WRAP: Sentiment rises, mills set to increase offers

Domestic prices for steel hot-rolled coil across Europe inched upward over the week to Friday October 16, with buyers expecting prices to rise further.

Buyers expected that the mills would soon announce the next round of increases in offer prices.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €495.83 ($580.74) per tonne on October 16, up by €2.33 per tonne week on week and by €13.21 per tonne month on month.

Friday’s index was based on achievable prices heard at €490-500 per tonne ex-works.

The region’s steelmakers have pushed their official offers for HRC up to €520-540 per tonne, sources said, although this range was not included in the index because no deals have been confirmed at that price.

Fastmarkets’ weekly price assessment for steel HRC, domestic, exw Southern Europe, was unchanged over the week at €480-490 per tonne on October 14.

Italian producers have been offering and trading the material at €480-490 per tonne ex-works.

Northern European mills have sold out of December-rolling HRC, and their peers in the south have almost sold out December and were expected to soon start selling January-production material. They were expected to push official offers further upward soon, market sources said.

Demand for the material, in the meantime, remained strong, sources told Fastmarkets. Some steelmakers have been delaying deliveries of products ordered earlier, according to market participants, and capacities brought back into operation in September were still not producing at normal rates.

Domestic prices have been supported by strong demand from the automotive sector, market sources said. Some buyers, however, questioned the sustainability of good demand from that industry.

Sales of passenger cars in the EU increased by 3.07% year-on-year in September 2020, making it the first monthly rise in 2020 in a year-on-year comparison.

Buyers, however, preferred to remain in “wait-and-see” mode until the pricing trend became clear. But the majority of market sources believed that prices would either remain stable or start to rise gradually.

Tougher safeguard measures settled in the middle of 2020, combined with an anti-dumping case into HRC from Turkey, a major HRC exporter to the EU, have left buyers with a limited number of alternatives to domestic material, market sources said. This also continued to support domestic prices.

Import offers available in the European markets have been limited and the majority of buyers have claimed that those present in the market have been uncompetitive.

European buyers have been cautious in acquiring HRC from Turkey despite limited availability of domestic material. This was due to the anti-dumping case.

European steel industry association Eurofer filed a complaint to the European Commission (EC) seeking the registration of all HRC imports from Turkey. If the EC accepts the complaint, then imports of the material in question will have to be registered and any anti-dumping duties could be imposed retroactively for the three months prior to the imposition of preliminary measures, sources said.

The EC was expected to make an announcement this week. This has left some European buyers reluctant to purchase Turkish HRC at the moment.

Provisional measures in the case, if any, will be imposed by January 14, 2021, with definitive duties scheduled to be set by July 13, 2021.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Northern Europe, was €470-480 per tonne on October 14, down by €10 per tonne week on week from €480-490 per tonne.

The assessment reflected achievable prices and offers heard in the market.

Offers of Russian HRC have been heard at €470 per tonne fca Antwerp, compared with €481-486 per tonne fca Antwerp a week earlier.

The price assessment for steel HRC, import, cfr main port Southern Europe, was €470-480 per tonne on Wednesday, down by €5-10 per tonne week on week from €475-490 per tonne.

The assessment reflected offers heard in the market for material from Turkey, Egypt and India.

At the end of last week, flat steel producer Liberty Steel Group made a non-binding offer to acquire the steel business of German industrial group Thyssenkrupp.

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