European Steel Prices CRC, HDG Move Up, But Steel Remain Bellow Offer Prices -Steel News By GTS Steel

European Steel Market Updates March 2024: Slow Demand and Production Cuts

In the week leading up to Wednesday, January 17, European prices for steel cold-rolled coil (CRC) and hot-dipped galvanized coil (HDG) witnessed a slight increase. However, despite this uptick, prices remained below target levels as the market grappled with sluggish demand, according to insights gathered by Fastmarkets.

One of the primary concerns cited by industry sources was the slow demand from key end-user sectors, particularly automotive and construction. A steel service center source in Germany expressed apprehension, forecasting a significant drop in steel consumption by the automotive sector in 2024, projecting a decline of 20-30% compared to the previous year.

Although demand remained subdued, limited supply due to reduced production and escalating input costs prompted European mills to implement substantial increases in offer prices at the onset of January.

Offers from integrated mills in Northern Europe were reportedly in the range of €900-920 ($980-1,002) per tonne ex-works for both CRC and HDG, with lead times extending to April-May at the earliest.

However, buyers expressed skepticism regarding these elevated offer prices, deeming them disconnected from the current market reality. Buyers’ estimations of achievable prices were notably lower, at around €820-830 per tonne ex-works for CRC and €830-840 per tonne ex-works for HDG.

Despite initial resistance from buyers, mills managed to gradually consolidate previous target price levels for both CRC and HDG following the announcement of higher offers.

Fastmarkets’ weekly price assessment reflected this trend, with steel CRC domestic prices in Northern Europe reaching €820-835 per tonne, up by €15-20 per tonne from the previous week.

Similarly, HDG domestic prices saw an increase, reaching €830-840 per tonne, up by €10-30 per tonne from the previous week.

The market situation in Southern Europe mirrored that of the North, with trading described as “dead” in the region. Southern European producers aimed for prices of €870-880 per tonne delivered for CRC and €900-920 per tonne delivered for HDG.

However, buyers’ estimates of tradeable values were considerably lower, at no higher than €840-850 per tonne delivered for CRC and €850-860 per tonne delivered for HDG.

Industry sources highlighted the surplus stock among buyers in the region, as well as their efforts to lower inventories amidst sluggish market conditions. The low activity in the construction market and the looming downturn in the automotive sector, coupled with high-interest rates deterring investments, contributed to the prevailing market inertia.

Import offers for CRC and HDG from Asia witnessed an upward trend during the assessment week. Current CRC import offers were in the range of €735-760 per tonne CFR, up from €725-740 per tonne CFR earlier in January. Asian suppliers were offering material for shipment in mid-March to early April, with expected arrival in May-June.

Notably, South Korean and Japanese mills were among the prominent suppliers offering CRC to Southern Europe and Italy, with prices ranging from €735 to €760 per tonne CFR.

Additionally, Vietnamese steel supplier were targeting prices of $900-930 per tonne CFR for 0.5mm HDG galvanised steel coils with Z100-120 coating.

European prices for cold-rolled coil (CRC) and hot-dipped galvanized (HDG) coil have declined due to weak demand:

According to sources cited by Fastmarkets, sluggish real demand and fierce competition from imports drove down prices for cold-rolled coil (CRC) and hot-dipped galvanized (HDG) coil in Europe during the week ending on Wednesday, February 14.

Producers of cold-rolled coil refrained from issuing firm offers, citing an inability to compete with significantly cheaper imports, as noted by multiple sources.

A mill source in Europe highlighted the persistently high energy costs across the continent, emphasizing the energy-intensive nature of the annealing process crucial for CRC production.

Additionally, distributors observed that cold-rolled coil typically originates from Northern EU steel mills and isn’t readily available at competitive prices for Southern EU countries like Italy.

Buyers in Southern Europe estimated tradable prices for CRC to be in the range of €800-820 ($860-881) per tonne ex-works, while offers were reported around €840-850 per tonne delivered (€825-835 per tonne ex-works).

Consequently, Fastmarkets’ price assessment for steel cold-rolled coil domestic, ex-works Southern Europe stood at €810-825 per tonne on Wednesday, marking a decline of €15-20 per tonne week on week from the previous range of €830-840 per tonne.

The market saw competitive offers from overseas steel supplier, contributing to the downward pressure on European prices. Transactions for CRC originating from South Korea and Taiwan, with April shipment, were reported at €740-750 per tonne CFR to Southern Europe in early February.

Meanwhile, in the hot-dipped galvanized (HDG) market, competition from imports was less pronounced due to overseas steel coils manufacturer inability to supply the full range of grades and dimensions demanded by European buyers.

However, sources noted that slow real demand continued to exert downward pressure on HDG prices.

Southern European steel producers were observed reducing offer prices to €850-860 per tonne ex-works for HDG, a decrease from the €880 per tonne ex-works reported in January.

Most suppliers still had the capacity to offer April-delivery HDG, suggesting weak order books.

Buyers’ estimations of tradeable values for HDG did not exceed €860-870 base delivered (€845-855 per tonne ex-works).

As a result, Fastmarkets’ price assessment for steel hot-dipped galvanized coil domestic, ex-works Southern Europe stood at €845-855 per tonne on Wednesday, reflecting a decline of €15 per tonne from the previous range of €860-870 per tonne.

Overseas offers for HDG to Europe were scarce due to Lunar New Year celebrations in Asia.

Recent offers from steel supplier in Vietnam, price for 0.5mm HDG with Z100 coating were reportedly aiming for $880-890 per tonne CFR to Southern Europe. However, given the ongoing downtrend in global HRC markets, most sources anticipate Vietnamese suppliers to return with lower offers in the following week.

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Source: Compiled from Eurometal.net