European HRC market pessimistic on negative fundamentals

Negative sentiments settled in the EU HRC market June 16 with fundamentals unlikely to change in the near term, sources reported.

The Platts Northwest European hot-rolled coil assessment fell from Eur900/mt ex-works Ruhr to Eur875/mt ex-works Ruhr on the day, according to data from S&P Global Commodity Insights.

Although no deals for German material could be confirmed at the sub-900/mt level June 16, buyers expected further decline in prices going forward, reinforced by transactions reported into the Ruhr region ex-Central Europe.

Trader and service center sources reported separate deals at Eur870/mt and Eur860/mt delivered Northern Europe ex-Central Europe, respectively.

Different trader and service center source reported prices of Eur850-900/mt as achievable on the day, compared with deals heard earlier in week beginning June 13 at Eur900/mt ex-works Ruhr.

A mill source reported bids at Eur850/mt ex-works Ruhr, considering this level as workable on sufficient volumes. The source expected prices to continue on a slower decline into mid-July when prices would stabilize into the summer shutdown period.

Amid low demand, sources reported near-term revival as unlikely owing to subdued demand from the automotive sector and risk-averse buyers not restocking against pricing downtrends. However, mills were still offering short lead times — with order books for July rolling unfilled — due to constrained demand and resultant oversupply in the European market.

Against market expectations, mills are yet to announce cuts to production capacities, preferring to reduce shifts and extend traditional maintenance periods.

Mills were accepting buyers’ bids in an attempt to secure volumes, with settled prices much lower than initial offers.

“End-users are kings of the market now — they control the prices,” said a mill source. “Demand is very weak; buyers prefer not to book beyond minimum volumes, as prices are decreasing daily with nobody wanting to commit to purchasing.”

In South Europe, hot-rolled coil prices also moved down on the day, assessed down Eur15/mt at Eur835/mt ex-works Italy.

A trader source reported deals at Eur830-850/mt ex-works Italy. Another trader saw offers at Eur850/mt ex-works Italy, expecting workable price levels to fall to Eur800/mt ex-works Italy in the near term.

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