Steel Market Updates – 21 March 2024 by GTS Steel

HRC Steel Prices Keep Stable In European Market – Updated From Steel Supplier In Vietnam

European hot-rolled coil (HRC) prices exhibited minimal movement on Thursday, March 14, as trading activity remained subdued amidst sluggish downstream demand and a prevailing sense of pessimism among buyers, according to sources familiar with the matter as reported by Fastmarkets.

Despite a noticeable decline in prices in recent weeks, trading volumes in the European HRC market remained constrained. A buyer based in Germany remarked, “There is no uptick in trading. Despite price reductions, steel demand remains lackluster. Buyers are adopting a wait-and-see approach, anticipating further price declines.”

Fastmarkets learned that buyers showed little inclination to replenish their stocks owing to reduced order intake from end users. Moreover, industry insiders anticipated a continued downward trajectory in domestic HRC prices in the near term, exacerbated by declining raw material costs and prevailing weakness in finished steel markets.

A source from Northern Europe commented, “Mills are eager for orders but are reluctant to slash prices significantly. End-user demand is exceptionally feeble, leading most buyers to refrain from restocking.”

Sources noted a trend of destocking among buyers, with intense competition prevailing in the secondary market among steel service centers, traders, and stockists.

Reports suggested that Northern European steel manufacturer aimed to maintain offers within the range of €700-730 per tonne ex-works, while buyers’ price expectations hovered around €680-700 per tonne ex-works.

Mills in Northern Europe reportedly offered lead times extending into April-May.

Fastmarkets’ daily steel HRC index for domestic ex-works Northern Europe stood at €695.33 per tonne on Thursday, marking a marginal decline of €0.92 per tonne from the previous day. The index exhibited a weekly decrease of €12.80 per tonne and a monthly decline of €50.67 per tonne.

In Southern Europe, Fastmarkets’ corresponding steel HRC index for domestic ex-works Italy was calculated at €673.75 per tonne on Thursday, reflecting a decrease of €1.25 per tonne from Wednesday. The index recorded weekly and monthly declines of €13.75 per tonne and €61.88 per tonne, respectively – updates from HRC steel manufacturer in Vietnam.

In Italy, limited quantities of HRC reportedly traded at around €670 per tonne ex-works, with buyers estimating achievable prices ranging from €650 to €680 per tonne ex-works. April-delivery HRC remained available from Italian suppliers.

Buyers in Italy indicated that the floor for HRC prices had yet to be reached, hence their reluctance to engage in bookings. “There is still scope for [HRC] price adjustments. Output cuts would be the most effective measure to halt the downward trend, but European mills are in no rush to implement them,” remarked a buyer in Italy.

HRC offers for June-July delivery from Taiwan, Vietnam, and Japan were reportedly priced at €580-600 per tonne CFR on Thursday. However, interest in importing coils remained limited despite lower prices compared to domestic offerings.

Sources highlighted elevated risks associated with EU import safeguards, particularly for the “other countries” category, where the most competitive offers originate, namely Vietnam, Japan, and Taiwan. Additionally, prolonged lead times were reported, further dampening buying interest.

Buyers also anticipated further declines in import prices in the short term due to weak demand dynamics and falling raw material costs.

EU market participants aim to cut production to support HRC prices

European hot-rolled coil (HRC) mills are anticipated to scale back production due to a dearth in genuine end-user demand, leading to a downward trajectory in domestic prices. Reports from the market indicate a necessity for production cuts to counterbalance the continual decline in prices, with demand showing minimal signs of improvement as of March 18.

According to industry insiders, it is imperative for mills to announce tangible reductions in production capacities and uphold stable pricing to stabilize the European HRC market. Traders express reluctance in purchasing domestic HRC at current rates, foreseeing further declines in prices. Distributors echo this sentiment, emphasizing the urgent need for substantial capacity reductions to halt the ongoing price deterioration, suggesting that there is no apparent floor price at present.

See more:

• Prepainted galvanized steel coil supplier in Vietnam

In Northwest Europe, tradable values for domestic HRC hover around Eur680-690/mt ex-works Ruhr, with the prevailing data indicating prices at Eur680/mt ex-works Ruhr. Platts’ assessment registers a decrease of Eur5/mt in the domestic HRC price in Northwest Europe on March 18, settling at Eur680/mt ex-works Ruhr.

Similarly, in Southern Europe, tradable values for domestic HRC are situated at Eur650-670/mt ex-works Italy. Platts’ assessment notes a decline of Eur5/mt in the domestic HRC price in South Europe on March 18, reaching Eur660/mt ex-works Italy.

Import activity remains subdued as market participants await clarity on safeguard quotas for imported HRC. Offers for HRC originating from Vietnam and India are reported at Eur600/mt CIF Italy for May shipment and June delivery in Southern Europe.

European HRC prices continue decreasing, steel manufacturers claim output cuts

European steel hot-rolled coil (HRC) prices sustained a downward trajectory on March 18, attributed to sluggish demand and buyer apprehension regarding the market’s bottoming out, according to sources familiar with the matter.

Fastmarkets’ daily steel hot-rolled coil index for domestic sales, excluding works from Northern Europe, registered at €689 ($750.12) per tonne on Monday, marking a slight dip of €3.50 per tonne compared to €692.50 per tonne on March 15. Week-on-week, the index witnessed a decline of €10.33 per tonne, while on a monthly basis, the decrease amounted to €43.13 per tonne.

Offers for HRC in Northern Europe ranged between €700 and €710 per tonne ex-works, showing a notable reduction from late February levels, where prices fluctuated between €730 and €750 per tonne ex-works, down by €30-40 per tonne.

Despite the decreased pricing, trading activities remained subdued, with no significant transactions reported in the market. A German trader noted, “Buyers prefer to adopt a ‘hand-to-mouth’ approach and refrain from stockpiling HRC.”

Market sources estimated the tradable market level to hover around €670-690 per tonne ex-works, indicating a cautious sentiment among buyers awaiting further price adjustments.

One buyer source emphasized the prevalent wait-and-watch strategy among purchasers, stating, “Demand remains subdued as buyers anticipate reaching the rock bottom of HRC prices.” Notably, only minor spot transactions, ranging from 100 to 200 tonnes, were observed, with no signs of restocking.

Meanwhile, there were speculations regarding potential output cuts by mills; however, no official announcements were made by steel producers. A consensus emerged among industry insiders that further price reductions might not effectively stimulate demand, potentially leading to a stalemate in market dynamics.

See more:

• Galvalume Steel Manufacturer In Vietnam

Contrary opinions suggested that any decision to cut output might not yield immediate results due to operational complexities associated with idling blast furnaces. Moreover, recent restarts of some capacities in January and February hinted at a nuanced market scenario.

In Southern Europe, Fastmarkets’ daily steel HRC index for domestic sales, excluding works from Italy, witnessed a marginal decline to €670 per tonne on March 18, down by €1.67 per tonne from €671.67 per tonne on March 15. Weekly and monthly declines amounted to €5 per tonne and €60.83 per tonne, respectively.

Offers for HRC in Italy were noted at €690 per tonne delivered, equivalent to approximately €680 per tonne ex-works, while market participants pegged the tradable market level at €660-670 per tonne ex-works.

Imported HRC offers remained limited in the European market, with Asian suppliers quoting prices for June-July arrivals in the range of €580-600 per tonne CFR. Additionally, May-shipment HRC from India was offered at €600 per tonne CFR to Italy, with some bids reported at €550 per tonne CFR.

Commenting on the market dynamics, a buyer in Italy cited declining domestic and import HRC prices as a reason for buyer reluctance, coupled with concerns over potential quota exceedances leading to duty implications, further dampening import demand.

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