Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe
, at €402.00 ($451.98) per tonne on Friday, up by €8.25 per tonne week on week, but stable month on month.
Friday’s index was based on deals heard at €390-410 per tonne ex-works, but market sources claimed that most mills were reluctant to trade at prices lower than €400 per tonne ex-works.
And Fastmarkets’ weekly price assessment for steel HRC, domestic, exw Southern Europe
, was €380-400 per tonne on July 1, up by €5-20 per tonne week on week from €375-380 per tonne.
The assessment represented deals heard in the market. But sources pointed out that the majority of deals were being done at €380-390 per tonne ex-works.
Official offers, however, have been heard at €400-420 per tonne ex-works.
Domestic HRC prices across Europe have been declining since early March this year.
Market sources claimed that demand has started to recover slowly in the EU since the Covid-19 lockdown measures were eased, and due to some government programs intended to support steel-consuming industries, such as the automotive sector.
More deals have been heard in the past week and market participants reported increases in shipments from both end-consumers and steelmakers.
Some sources, however, have questioned the sustainability of the price recovery because, although market activity has started to revive, it is still happening at a slow pace.
“The problem for the mills is that the rolling mills that produce cold-rolled coil [CRC], which usually absorb big volumes of HRC, have very little work because they are focused on the [moribund] automotive industry. These quantities are missing, [and this adds to] the general recession we are facing,” a German trader said.
The European Automotive Manufacturers Association (ACEA) has forecast a 25% year-on-year fall in car sales in 2020
because of the Covid-19 pandemic.
Sales of passenger cars in Europe fell by 52.3% year-on-year in May
, marking the fifth consecutive month of decline, according to ACEA data. The May decline was less dramatic than that in April, when new passenger car registrations fell by 76.3% year-on-year
Apart from some flat steel demand recovery, domestic HRC prices have also been supported by the lack of competitive import offers in Europe.
This was explained by the fact that global flat steel prices have started to recover faster compared with those in Europe, meaning that the EU market was not the best outlet for traditional suppliers.
In addition, the European Commission (EC) announced its definitive decision in the EU’s safeguard measures review
on June 30. The EC has decided to replace yearly country-specific quotas with quarterly quotas, among other changes.
Some suppliers, such as India, have withdrawn their offers from the market because they believed that their third-quarter quota was filled by orders they took earlier and that would soon arrive in Europe.
Others have been offering HRC for September shipment, meaning that some suppliers will not use their third-quarter quota and volumes ordered now will reach the EU border in the last quarter of 2020.
At the end of last week, Tata Steel reached an agreement with trade union FNV Metaal
over its Dutch assets, bringing an end to 25 days of industrial action.