Hot rolled coils: prices still down due to weak demand

Domestic prices for hot-rolled coils declined in Northern Europe due to limited purchasing activity. Northern European HRCs were assessed to be down €10 at €1265/mt ex-works Ruhr.

Although there were few official offers at 1300-1330 euros/ton ex-works Ruhr, these were considered unfeasible by buyers. Market sources have estimated attainable prices at 1250-1280 euros/ton ex-works Ruhr, with scenarios for a larger drop in the short term to 1200 euros/ton ex-works.

Buyers across Europe have held off on making new deals because they believe prices could fall further.

Buyers have sufficient inventories and prefer to wait for prices to fall before making any deals. Consumer demand is low, particularly in the automotive sector. Even with high energy and other production costs, the 1,200 euro/ton ex-factory price should be high enough to cover costs and give a margin.

It seems that all manufacturers, both European and overseas, are looking for orders, which ultimately means lower prices. Currently, demand is weak due to lower automotive consumption. But this situation was caused, among other reasons, by the fact that at the end of last year, automotive and related companies acquired all available material due to rising steel prices. Buyers, moreover, still have good inventory levels. So a further decline is expected.

Imported hot-rolled coils in Northern Europe were valued at €1,125/mt CIF Antwerp. Domestic prices in Italy remained stable on May 3, but the situation is similar to that in Northern Europe and bearish sentiment prevailed in the market. Competitive import offers contributed to the downward sentiment in southern Europe.

HRCs in Italy were unchanged at €1,175/mt ex-works Italy. Official offers in Italy were 1,200-1,250 euros/ton ex-works and attainable prices were reported at 1,150-1,180 euros/ton ex-works.