Will flat steel demand in Europe recover?

Wednesday, 24 July 2019 17:17:45 (GMT+3)   |   Brescia
       

Over the past week, flat steel prices in the Italian market have decreased slightly due to low demand. Currently base prices of hot rolled coils (HRC) are mainly in the range of €440-460/mt ($488-511/mt) ex-works, down €10/mt week on week. At the same time, prices for cold rolled coils (CRC) have declined by €12.5/mt on average to €515-530/mt ($571-588/mt) ex-works and prices of hot galvanized (HDG) coils have decreased by €10/mt to €515-535/mt ($571-594/mt) ex-works, week on week.

As noted previously, market sources believe that there will be a recovery in European flat steel prices at the end of the summer break. Local producers are in fact seeking to improve their profit margins, which in the first half of the current year suffered significant erosion. However, they will continue to struggle with low demand and, perhaps, with a decline in import offer prices. Turkish flat steel producers, due to reduced sales opportunities, could become more aggressive in the export markets. Nevertheless, flat steel prices in Europe should be supported by resumption of purchases by local buyers, who have not made purchases in June and July. Their stocks are falling to low levels, though at a slow rate amid low demand due to both the weakness of the automotive industry and the traditional summer lull.

Meanwhile, according to the latest information available from the European Commission website concerning its definitive steel safeguard, as of July 18, 406,380 mt of HRC were imported out of the three-month overall quota of 2.172 million mt. As of July 22, 26,007 mt of HRC awaited allocation. The quota for HRC is for the period from July 1 to September 30.

€1 = $1.11


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