European hot-rolled steel coil prices were little changed at the end of October amid limited activity, but participants are expecting more announcements of price increases from mills soon, sources told Fastmarkets.
Fastmarkets calculated the daily HRC steel index for the Northern European warehouse domestic market at €615.21 ($648.91)/t on October 27, up €1.79/t from €613.42/t on October 26.
The index was also up €2.08/t w/w but down €10.42/t m/m.
Market sources largely agreed that rolled steel prices had reached rock bottom levels and further declines were considered unlikely due to rising costs at mills.
Semi-finished products in the region for delivery in December were offered at €620-650/t ex-works, while buyer estimates of achievable prices were still in the range of €600-620/t ex-works, which was stable compared to the day before. .
A distributor in the Benelux region offered similar material at a price of 595-600 euros per tonne ex works.
But sources noted that the lower prices were only achievable for December delivery tonnages, while mills were planning to announce price increases for January delivery coils.
There have been few deals lately and most buyers tend to book small volumes to meet immediate needs.
But sources noted a slight increase in buying interest this week as there was greater awareness that prices had bottomed out.
“Large distributors and metal service centers send requests. Nobody is going to buy large tonnages yet, but compared to the completely calm first half of October, we are now seeing some movement in the market,” said a source at a plant in Northern Europe.
Manufacturers are hoping to push higher HRC prices with January delivery dates in anticipation of lower imports, reduced production and some demand to replenish inventories.
However, some consumer sources were more pessimistic, arguing that the current low level of consumption is not conducive to rising prices.
“Demand is still very weak, there is no light at the end of the tunnel. Order lead times are short, some even within four weeks, indicating that mills' order books are thin at the moment,” said a source at a steel service center in the region.
The daily HRC steel index, domestic market, excluding imports to Italy, by Fastmarkets, amounted to 600.63 euros per tonne on October 27, up 0.63 euros per tonne from 600 euros per tonne the day before.
The index was up €3.96/t w/w but down €8.33/t m/m.
Offers for HRC for December delivery from Italian producers have been reported at €620-630/t ex works, but such levels have not yet been reached in transactions.
The buyer estimated that the realized price was closer to €600 per tonne ex-works, as mills rejected offers below this level.
Market sources also noted a slight improvement in trade in Italy, with some steel distributors and service centers feeling the need to replenish stocks, Fastmarkets said.
Imports of HRC of Asian origin for late December-January deliveries were offered to Italy at around €580-600 per tonne CFR, mainly from Vietnam, South Korea and Japan, stable on a weekly basis.
