European prices for steel hot-rolled coil continued to decrease on Monday March 11 amid persistently slow demand and bearish expectations among buyers, industry sources told Fastmarkets. Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €699.33 ($764.92) per tonne on Monday, down by €4.92 per tonne from €704.25 per tonne on March 8. The index was down by €15.67 per tonne week on week and by €51.17 per tonne month on month.
In Northern Europe, offers of HRC were heard around €720-730 per tonne ex-works from integrated producers, but market participants estimated this level to be unworkable.
According to buyers, tradable market levels were in the range of €680-710 per tonne ex-works. Demand remained weak, and no major deals were heard in the market.
“No matter what the price is now, there is no demand [and] there are no [HRC] volumes [being] traded,” a steel service center in Germany said. Market participants were convinced that the “rock bottom” of HRC prices has yet to be reached. Due to this expectation, buyers continued to refrain from trading.
“No one intends to sign contracts in a falling market,” a buyer source told Fastmarkets, adding that buyers’ strategy to postpone bookings and bring prices down was being successful. Now customers were trying to bring prices below the €700 per tonne ex-works mark, but it was not clear where the bottom would be.
“The downtrend is not over yet, and prices are likely to keep sliding,” a second buyer source told Fastmarkets.
But there were differing expectations for the “rock bottom” of HRC prices in Northern Europe. A third buyer source expressed the opinion that it would be around €650 per tonne ex-works, while a seller source said that prices would stabilize around €680 per tonne ex-works.
“There is plenty of speculation about the rock bottom for the [HRC] price,” a second buyer source said. “One thing is clear – mills cannot keep reducing prices [because] the cost line is already close. Production cuts [at European mills] might help to stop the downtrend.”
In Southern Europe, Fastmarkets’ steel HRC index, domestic, exw Italy, was calculated at €675.00 per tonne on Monday, down by €3.75 per tonne from €678.75 per tonne on March 8. The index was down by €19.00 per tonne week on week and by €73.75 per tonne month on month.
In Italy, offers of HRC were heard at €690 per tonne delivered, which would net back to €680 per tonne ex-works. Market participants estimated the tradable market price in the range of €680-690 per tonne ex-works.
“Room [for further price decreases] is limited,” a fourth buyer source said, adding that a further price drop by €20-30 per tonne was still possible.
Import offers of HRC from Vietnam to Italy were heard at €595-600 per tonne CFR.
According to the first buyer source, the tradable price for imports was in the range of €580-600 per tonne CFR, pointing out that sizeable tonnages of HRC were already stored in EU ports waiting for customs clearance in the second quarter of the year.
Source: Fastmarkets
