The standstill in the European markets for steel hot-rolled coil continued on Tuesday February 6, with prices broadly unchanged amid sluggish trading, industry sources have told Fastmarkets. HRC buyers in Europe continued to postpone restocking due to weak sales to end-users and sufficient inventories, market sources said.
“Our sales to the automotive industry during January were lower than we planned,” a stockholder in Germany said. “There is no immediate need to book new tonnages [of HRC] for stock.” As a result, mainly hand-to-mouth bookings have been reported recently, with buyers purchasing “only what’s absolutely necessary,” Fastmarkets heard.
In Northern Europe, buyers’ estimates of tradeable values were heard at €750-770 ($807-828) per tonne ex-works for April-delivery coil. Despite slow trading in the spot market in the past couple of weeks, European mills felt no pressure to reduce their prices because they had good order books for first-quarter-rolling HRC, market sources said. Official offers from mills in Northern Europe were still being reported at €780-820 per tonne ex-works for April-delivery HRC.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €759.58 per tonne on Tuesday, down by €0.42 per tonne from €760.00 per tonne on February 5. But the index was up by €2.70 per tonne week on week and by €64.58 per tonne month on month.
Meanwhile, in Southern Europe, Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €752.50 per tonne on Tuesday, stable day on day. The index was down by €1.25 per tonne week on week but up by €62.92 per tonne month on month. Official offers from Italian mills for March- and April-delivery coil were heard at €780 per tonne delivered (€765-770 per tonne ex-works), while one producer was reported to be offering HRC at €800 per tonne delivered (€785-790 per tonne ex-works). The Italian market was also quiet, with buyers taking a wait-and-see stance and only restocking special grades and sizes if needed.
Estimates of tradeable values were heard in the range of €745-760 per tonne ex-works on Tuesday.
“Due to low demand downstream, buyers have sufficient stocks and [are holding back from] purchases,” a steel service center said.
On Tuesday, two sources told Fastmarkets that Vietnamese HRC suppliers have reduced their offers of late-March/early-April shipment HRC to Europe. The most recent prices were reported at €635 per tonne CFR to Southern Europe early this week. This was due to weak demand domestically, market sources said. Despite the large gap to domestic prices, market sources were in no hurry to make bookings, taking into consideration all the associated risks.
“Vietnam falls into the ‘other countries’ category [for imports into the EU], so there is quite a big risk of [being required to] pay the duty on arrival [of HRC material at ports],” a buyer in Italy said. “And of course, we still have logistics issues due to the Red Sea crisis.”