European hot-rolled coil (HRC) prices edged down slightly on Monday, February 12th, as limited trading activity and buyer caution prevailed in the market.
Key Drivers:
- Limited trading: Mills in Northern Europe offered discounts for larger volumes to fill order books, but buyers remained hesitant, hoping for further price declines.
- Production cuts vs. restarts: Mills attempted to stabilize prices by reducing output, but some blast furnaces are expected to resume operations in February, potentially impacting price stability.
- Weak demand: Real demand remained sluggish, further contributing to the muted trading activity.
Price Movements:
- Fastmarkets’ daily HRC index (domestic, ex-works Northern Europe) decreased by €3 per tonne to €747.50 per tonne, down €12.50 week-on-week but up €15.62 month-on-month.
- The corresponding index for Italy also dipped slightly, down €1.25 per tonne to €747.50 per tonne.
- Tradable market levels were estimated in the range of €740-750 per tonne ex-works in Northern Europe and €725-760 per tonne ex-works in Italy.
Market Outlook:
- Buyers are holding off from restocking due to price uncertainty and sufficient existing stock levels.
- The restart of idled blast furnaces could put additional downward pressure on prices.
- Market participants anticipate a wait-and-see approach from both mills and buyers, with prices potentially moving depending on who can hold out longer.
Additional Insights:
- Offers for imported HRC from various countries were reported, ranging from €630 per tonne CFR (Vietnam) to €690 per tonne CFR (Turkey). However, tradability of these offers remained uncertain.
- Platts assessed domestic HRC prices in Northwest Europe unchanged at €745 per tonne ex-works Ruhr, with tradable values reported at €730-760 per tonne.
- Platts assessed domestic HRC prices in South Europe down by €5 per tonne to €740 per tonne ex-works Italy.
Overall, the European hot-rolled coil market is experiencing a period of cautious trading with prices facing downward pressure due to weak demand and potential production increases. The future direction of prices will likely depend on the evolving dynamics between supply, demand, and market participants’ strategies.
