According to the sources, European HRC producers are having difficulty in taking orders, while buyers are delaying their purchases due to full stocks and unfavorable market conditions.
The Northern Europe EXW HRC index, which was €648.33 per ton on Thursday last week; down €3.33 to €645 ($649.75) per ton on Friday. Thus, it decreased by € 2.50 per ton w-o-w and € 73.75 per ton m-o-m.
According to information from buyers, several sales of small volumes of HRC have been made in the region at the EXW level of €630-650 per tonne. Producer sources in Germany have stated the workable level as €650 per tonne EXW minimum, claiming that this price is already very close to the cost line.
Most producers in the region are still offering December-rolling coil to the market. Producers are reluctant to give firm offers for first-quarter production HRC due to weak market indicators.
“The idea for manufacturers is to increase prices for January-February production, but it doesn't seem possible at the moment as there is a lack of demand,” a distributor in the region said. Meanwhile, buyers believe there is still room for prices to fall due to the extremely weak demand and excess supply in the market. In particular, steel service centers and distributors in Europe are still struggling to reduce their stock levels before the end of the year.
The daily HRC index exw Italy was €625 per ton on Friday, up €5 from €620 per ton on Thursday. Thus, it fell by € 40 per ton w-o-w and € 90 per ton m-o-m. A buyer source reported a transaction by a local producer at €620 per tonne CPT; this equates to €600 EXW per tonne. Meanwhile, the minimum price offers given by the producers in the country are around 650 € EXW per ton. Distributors in the country estimate the achievable price level per tonne, depending on volume, in the range of €620 to €650 EXW.
Import HRC offers also declined over the weekend
HRC offers from Japan and South Korea to Italy were heard at €570-585 CFR per tonne, compared to €600-620 CFR per ton earlier this week. Southeast Asian producers were able to offer coils to Europe for January shipment.
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