European steel HRC suppliers seek higher prices, but downstream acceptance lags

Suppliers of steel hot-rolled coil (HRC) from Europe continued to seek higher prices on Monday September 7, amid limited supply from some mills and increased customer caution toward imported material.

Nevertheless, buying was limited on September 7 because strip prices, particularly in Italy, were still lagging.

Offer activity in the Italian market remained sparse. Despite restarting operations after an engine failure, Metinvest’s Ferriera Valsider operation has yet to resume making offers, according to a company source.

At the same time, Acciaierie d’Italia (ADI) is likely to be forced to stop steelmaking by October following a ruling by the Milan Court of Appeal issued on August 27.

This would leave Italy with only one hot-rolled coil supplier, which hoping to achieve price of €750 ($872) per tonne delivered, €730 per tonne ex-works.

Estimates of tradable prices from market sources were heard at €720-730 per tonne ex-works, while black sheet sales prices were heard at €820-830 per tonne delivered, netting back to €800-810 per tonne ex-works.

Nevertheless, considering the limited coil supply, market sources expected the sheet sector to show price increases this week.

“It looks like that upward price trend will further consolidate throughout September and the fourth quarter,” an Italian HRC producer said, “confirming the bullish sentiment justified by a supply-driven market, where the priority for all market participants will be to secure volumes before talking about prices.”

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy, was calculated at €727.50 per tonne on September 7, up by €4.79 from €722.71 per tonne on September 4.

The index was up by €10 per tonne week on week and by €18.75 per tonne month on month.

The Northern European market was relatively quiet during the day.

Suppliers hoped to achieve €760-790 per tonne ex-works for material scheduled for delivery in October-November, with tradeable prices indicated at €740-760 per tonne ex-works.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe, was calculated at €742.50 per tonne on September 7, down by €6.25 per tonne from €748.75 per tonne on September 4.

The index was up by €1.25 per tonne week on week and up by €25.00 per tonne month on month.

Availability in the region was affected by maintenance works at thyssenkrupp’s largest blast furnace (BF), which will continue until about mid-October.

In the import sector, activity was also limited because customers were cautious about safeguard quotas and uncertain about Carbon Border Adjustment Mechanism (CBAM) costs.

Indian material was heard available to customers in the region within the range of $660-670 (€568-577) per tonne CFR, although many buyers raised concerns over how fast the quota for the fourth quarter could be filled once open on October 1.

A cargo of Vietnamese material was heard booked at $670 (€577) per tonne CFR.

On a DDP basis, import material was available within the range of €710-750 per tonne, depending on origin, which led some buyers to opt for locally produced material.