Oct 25, 2022
European HRC buyers delay restocking amid unclear outlook

European hot-rolled coil buyers extended their silence on Monday October 24, with minimal trading activity reported amid poor demand and unclear sentiment, Fastmarkets heard.

The lack of clarity in the market continued to limit buying interest for HRC in both Northern Europe and Italy.

Producers have had problems selling their fourth-quarter volumes and were ready to cut offer prices for December-delivery material.

But buyers had little interest in fourth-quarter-delivery coil due to sufficient stocks. They also held back from booking material for delivery in the first quarter of 2023 amid unclear sentiment.

“Customers still don’t know whether it is time to book [HRC] or not. Sentiment is rather bad and there are no signs of a steel demand recovery,” one trading source in Germany told Fastmarkets.

Meanwhile, steel producers expect HRC prices to recover when buyers start booking their first-quarter volumes, so most refused to provide discounts on Q1-delivery coil for now.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €670 ($660.36) per tonne on Monday, up by just €5 per tonne from €665 per tonne on Friday.

Monday’s calculation of the index was down by €13.75 per tonne week on week and down by €95 per tonne month on month.

Buyers’ indications of achievable prices were reported at €660-670 per tonne exw.

Mills’ offers for December-delivery coil were heard at €670-685 per tonne exw, while for Q1 material, the minimum price would be €700 per tonne exw, sources said.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was €687.50 per tonne on Monday, up by €5 per tonne from €682.50 per tonne on Friday.

The latest calculation of the Italian index was stable week on week, but down by €73.75 per tonne month on month.

Italian producers maintained official offers at €700-720 per tonne exw for HRC with five to six weeks delivery, while buyers’ indications of achievable prices were lower at €670-680 per tonne exw.

HRC buyers in the nation were also opting to hold back from bookings and wait for a clearer market picture.

“This week is important; we will see if anything happens during EuroBlech [trade fair] – more production cuts announcements, some restocking. There is a lack of understanding, what the price bottom will be,” an Italy-based trader said.

Import HRC offers from Southeast Asia (South Korea, Japan, Taiwan), with delivery at the end of the first quarter, were reported at €630-640 per tonne cfr to Italy, while buyer’s indications of a tradeable price level for imports did not exceed €610 per tonne cfr.

Published by: Julia Bolotova

Source: Eurometal