EUROPE HRC WRAP: Domestic prices slide; further declines expected

Domestic prices for hot-rolled coil declined across the EU in the week to Friday October 1 due to lower demand from both the spot market and the automotive industry.

Buyers have been holding back from purchasing, in anticipation that domestic mills will soon accept lower prices. In addition,European distributors' stocks were sufficient, so they felt no pressure to obtain additional volumes in the short run.

At the start of the fourth quarter, European importers have been focused on customs clearance of the goods stocked in ports. Sources estimate that 1.5 million-2 million tonnes of steel products are currently awaiting customs clearance in ports.

HRC imported from India and Russia has most likely exceeded quotas, and so some volumes will be subject to duties of 25%. Consequently, buyers have rushed to clear imports through customs to minimize the impact on their deals. European authorities have not updated the information on imported volumes yet.

Bearish sentiment in the market has also been supported by reduced automotive demand. The industry has been running at reduced rates recently because of the global semiconductor shortage. As a result, additional volumes of coil have been released in the spot market.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at ?,?1,043.75 ($1,210.03) per tonne on October 1, down by ?,?10.00 per tonne week on week and down by ?,?85.42 per tonne month on month.

The index was based on achievable price estimates of ?,?1,030-1,050 per tonne ex-works.

Last week, another Northern European mill introduced a new carbon surcharge for steel products in response to risingemissions costs. German steelmaker Thyssenkrupp unveiled carbon surcharges of ?,?22.78 per tonne for HRC.

In April, Tata Steel Europe also introduced a carbon surcharge on its steel products.

Tata Steel officially separated its United Kingdom and Netherlands operationson Friday October 1 after an agreement was reached a day earlier.

Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at ?,?955.00 per tonne on October 1, down by ?,?8.75 per tonne week on week and by ?,?61.42 per tonne month on month.

It was based on achievable prices heard at ?,?950-960 per tonne ex-works.


Fastmarkets is hosting a complimentary webinar on the European flat steel industry on October 12. Register free via this link to hear our experts and analysts discussing the biggest issues facing the market.