This week, prices from European HRC suppliers have remained relatively stable though still with some upward bias reported both in northern and southern Europe despite sluggish trade activity. Meanwhile, sentiment has become mixed in the market, since, on the one hand, some market insiders claim that recent news about restarts of several steelmaking capacities, including Salzgitter and Tata Steel Netherlands, in the first quarter of 2024 may put pressure on HRC prices in the region, while, on the other hand, many sources still believe prices are unlikely to move down in the short run given increasing complications over import material bookings.
More specifically, large manufacturers in northern Europe have continued to aim for €800/mt ex-works and even €820/mt ex-works for their HRC for April deliveries, the same as last week. However, while these offers are still considered unworkable, with only some exceptional transactions reported at €800/mt, most mills have been offering their materials at €760-780/mt ex-works, against €760-770/mt ex-works last week. “Most offers are already voiced for April delivery in the north, with only some limited volumes left for March delivery,” a market insider said.
Offers from major Italian mills for delivery in March have settled at €765-770/mt ex-works, against €760/mt ex-works last week. However, the tradable prices have been estimated at €750-760/mt ex-works, up by €5-10/mt week on week. “Mills are still trying to push for higher prices, while actual trade activity is very limited due to weak end-user demand coupled with the sufficient stocks of most buyers,” a local trader told SteelOrbis.
At the same time, early this week news about the restart of Tata Steel Netherlands’ blast furnace No. 6, with a total annual capacity of 2.5 million mt of pig iron, in Ijmuiden, has appeared in the market. This news together with the restart of other steelmaking capacities, such as resumption of blast furnace A at Salzgitter Germany announced back in early January, have started to raise concerns among market participants. “Capacities restarts raise red flags, as all this uptrend among European mills is attributed to reduced supply, resulting from output cuts and not the recovery of demand,” a trader in Spain told SteelOrbis.
Meanwhile, import trade activity has been limited this week, with most offers unchanged at €665-715/mt CFR level. Offers from Asian suppliers have been voiced at €665-680/mt CFR, while offers for ex-India HRC have settled at €690/mt CFR, up by €10/mt week on week. “Buyers have been very cautious due to risks related to the safeguard quota, and so business activity has been on pause,” an Italian trader said.
Furthermore, following several deals for ex-Turkey HRC, this week offers from Turkey have been estimated at €715/mt CFR, including duty, though, according to some market insiders, “€700/mt CFR could be still reached.”
