EUROPE HRC WRAP: Domestic prices fall further; EU mills seek export deals

Domestic prices for hot-rolled coil fell across the EU in the week to Friday September 24 due to lower demand from both the spot market and the automotive industry.

In an attempt to bring domestic supply and prices under control, European steelmakers have started offering HRC to Turkey.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €1,053.75 ($1,234.95) per tonne on Friday September 24, down by €36.25 per tonne week on week and by €87.92 per tonne month on month.

The index was based on achievable price estimates and bids at €1,030-1,100 per tonne ex-works.

Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €963.75 per tonne on September 24, down by €36.25 per tonne week on week and by €54.17 per tonne month on month.

It was based on achievable prices and offers heard at €960-980 per tonne ex-works and estimates at €950-970 per tonne ex-works.

Spot buyers have been mainly holding back from new deals because they anticipated a further price decline. In addition, buyers already have sufficient stocks to last until the end of the year.

Reduced demand for steel from the automotive industry, largely caused by the global shortage of semiconductors, has also contributed to the downturn in market sentiment. And a lack of demand from car manufacturers has already prompted the release of additional volumes of flat steel to spot buyers.

Market participants said they now expect steel consumption in the European automotive sector to decline by 20-30%.

This also triggered active attempts by European mills to export HRC to Turkey, despite lower prices in the country.

Offers for commodity-grade November-shipment HRC from Northern European producers have been heard at $950-970 per tonne cfr Turkish ports.

New low-import offers in Europe have also contributed to buyers’ bearish mood, but the extent to which the overseas material will impact domestic prices remains uncertain. HRC imports exceeding safeguard quotas might be subject to duties.

Buyers are waiting for the European Union’s new quota period, which commences on October 1. European buyers have booked significant HRC volumes overseas, and European ports were reported to have exceeded quota limits.

It is widely expected that India and Turkey will use up their allowances in the first week of the new quota period, which means importers will have to pay safeguard duties at rates as high as 25% on any further imports.

Toward the end of the week to Friday September 24, HRC offers from Egypt and Japan to Italy were reported at €930-950 per tonne cfr.

Russia-origin HRC was also reportedly on offer in Italy at €810-820 – although this material is already subject to import duties.

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