EUROPE HRC WRAP: Domestic prices continue to fall on poor demand

Domestic prices for steel hot-rolled coil in Northern Europe decreased further during the week to Friday May 29, due to low demand.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €400.71 ($444.84) per tonne on Friday, down by €6.79 per tonne week on week and by €25.54 per tonne month on month.
Friday’s index was calculated based on deals and “workable” prices heard at €390-405 per tonne ex-works as well as offers heard at €400-410 per tonne ex-works.
And Fastmarkets’ corresponding weekly price assessment for steel HRC, domestic, exw Southern Europe, was €370-390 per tonne on May 27, compared with €380-390 per tonne ex-works a week earlier.
The assessment reflected the lower end of offers in Italy. Official offers have been heard at the equivalent of €370-400 per tonne ex-works.
Demand has been low from both distributors and end-users.
European distributors have sufficient stocks of material and, in addition, they would prefer to avoid booking significant volumes of HRC due to the uncertain economic outlook.
Among end-consumers, the automotive sector has been showing little demand for flat steel. Carmakers have sufficient stocks of flat steel that have gone unused during the Covid-19 lockdowns, and do not need to acquire more material just yet. Demand for new cars in Europe has also been low.
Sales of passenger cars in Europe tumbled by 76.32% year-on-year in April 2020, making it the fourth consecutive month to show a decline, according to data released by the European Automotive Manufacturers Association (ACEA).
At the same time, European steelmakers have been squeezed between high raw material costs and declining prices for rolled steel, market sources said. But domestic prices have been supported by low demand for imported HRC.
European market participants expected the region’s import quotas to decrease when a review comes into force on June 30.
The European Commission has released plans to replace global quotas for imported HRC with a variety of quarterly, per-country quotas for those supplier states that exceeded a 5% share of total material deliveries in the reference period of 2015-17. For other suppliers, the global quota will still be applied.
European steel association Eurofer has called for a 75% cut in existing quotas for imported steel, but market sources estimate that the reduction will be about 50%.
In addition, the European Commission has started an anti-dumping case into HRC from Turkey. Market participants said that Eurofer has also requested a review of existing anti-dumping tariffs on HRC from Russia’s Severstal.
Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe, was €370-390 per tonne on May 27, up by €10 per tonne week on week.
And Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Northern Europe, was €380-390 per tonne on the same day, compared with €370-390 per tonne a week earlier.

 

Maria Tanatar

maria.tanatar@fastmarkets.com

Published

Maria Tanatar

June 01, 2020

16:58 GMT

London