EUROPE HRC: Domestic prices stable as buyers step away from trading

Domestic prices for hot-rolled coil in Europe were fairly stable day on day in week 40; buyers holding back from making new deals until the market trend became clear, sources told ms con-cept.

Market sources believed that domestic HRC prices have peaked and were likely to remain stable during October. As a result, they now preferred to hold back from making new deals until a clearer market trend developed.

Prices in Europe have been following the same trend as in the Asian market, so with Asia on standstill at the moment, Europe is also stable. In addition, there are long lead times [from European mills] and buyers do not want to risk making deals now.

Those long lead times supported domestic prices, with Northern European mills offering end-December 2020 to first-quarter 2021 production. Lead times have become longer mainly because of production cuts during Covid-19 lockdowns and a seasonal demand increase in September.

Some sources believed that the situation might change, however, because mills in the north of Europe have restarted blast furnaces that were idled during lockdown. This will result in higher availability of material in the market and could restrict the positive trend.

Last week, ArcelorMittal relit blast furnace (BF) No1 at its Fos-sur-Mer plant in France and BF No3 at its Bremen production site in Germany.

Other market participants, however, expected steelmakers to keep production rates under control to support domestic prices.

Import offers to the EU have been limited because exporters were able to secure higher prices in alternative markets. In addition, an expected preliminary decision in the EU’s anti-dumping case into Turkish HRC has been keeping some buyers from making new deals with the country’s suppliers.

European steel association Eurofer has requested the registration of HRC imports from Turkey as part of the anti-dumping case. If accepted, this move could result in the retroactive application of tariffs, thereby putting off European buyers. Registration might start as soon as mid-October this year.

Sources: Fastmarkets / open market views