European steel hollow sections prices stable, HRC feedstock costs edge up

Fastmarkets’ weekly price assessment for steel sections (medium) domestic, delivered Northern Europe was €1,140-1,200 ($1,159- 1,220) per tonne on Wednesday, unchanged from a week earlier.

Traders said the market continued to be very quiet in the week, with prices unchanged since the beginning of July.

Costs for the product’s feedstock, hot-rolled coil, inched up slightly week on week amid slow trading activity.

Fastmarkets’ daily calculation of its steel hot-rolled coil index domestic, exw Northern Europe was €860 per tonne on Wednesday, up by €4.17 per tonne from €855.83 per tonne a week earlier.

HRC costs have remained largely stable since the beginning of July.

“We see the stabilization of prices for raw material,” a market participant said.

HRC is widely used in Europe’s automotive industry, which has shut for the summer holidays for three weeks, sources said.

Traders expect the seasonal slowdown to weaken demand for the feedstock.

Prices for hollow sections remain stable despite bullish sentiment in European HRC markets, with sources saying mills want to increase prices due to high production costs and output cuts.

Many mills have already shutdown or cut production for the summer, with even more set to close or reduce output next week, sources said.

One trader suggested sections prices will fall due to an oversupply of the product.

“No business is going on, everybody has stock,” the trader said. “I think everybody is in the same situation. Everybody is waiting and there’s nothing going on.”

Other market sources do not believe sections prices will decrease any further because of rising energy costs.

Fastmarkets’ weekly price assessment for steel sections (medium) domestic, delivered Southern Europe was €1,140-1,180 per tonne on Wednesday, stable week on week.

Meanwhile, the European Commission has announced plans to reduce gas use in Europe by 15% until next year in response to the risk of further gas supply cuts from Russia.

In a statement released on Wednesday July 20, the commission proposed a new regulation that would set targets for all 27 EU member states to reduce gas demand by 15% between August 1, 2022, to March 31, 2023.

“The prices are increasing day by day for gas, most [steel] companies cannot change from gas to oil or coal,” a second market participant said.