EUROPE HRC WRAP: Sentiment turns negative after buyers, sellers return to market

The mood in the European hot-rolled coil market soured in the week ended Friday August 27 after both buyers and producers started to return after the summer holiday in August.

Trading activity has been limited while buyers follow a wait-and-see strategy.

Buyers expect domestic coil prices to decline in September due to lower raw material costs.

Demand outlook for the automotive segment – one of the key end consumers for European Union flat steel – remains uncertain.

A continuing shortage of semiconductors has been limiting manufacturing rates of carmakers and has had a negative impact on steel demand.

Producers, however, have been reluctant to accept lower prices. European steelmakers have had good order books in 2021; most European mills are sold out until the end of the year, sources said.

Should the European Union and the United States resolve their Section 232 steel tariff trading dispute by November 1 as sources expect, HRC volumes from the EU market will be diverted to the US. This will aggravate the shortage in Europe, buoying prices there.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €1,138.33 ($1,343.04) per tonne on August 27, down by €4.17 per tonne week on week and by €8.13 per tonne month on month.

The index was based on achievable prices estimated by market sources at €1,120-1,150 per tonne ex-works.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy at €1,017.50 per tonne on August 27, down by €0.83 per tonne week on week and down by €39.17 per tonne month on month.

The index was based on offers and achievable prices heard at €1,000-1,050 per tonne ex-works.

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