The European hot-rolled coil market appears to be in holiday mood despite approaching the seasonally strongest second quarter of the year.
The Argus northwest Europe HRC index edged up by 25¢/t to €507.75/t ex-works today as mills managed to achieve meagre increases in a lacklustre market. The southern European import assessment edged down by €2.50/t to €490/t cif on fresh sales, and the discount for Italian ex-works material to northwest European edged up a touch to €20.50/t.
Traders are offering €510/t cfr or thereabouts to Antwerp for Turkish, Indian, Taiwanese and Russian coil, but demand is relatively low given the June lead time and lack of competitiveness after factoring in discharge and delivery to service centre. Some buyers would rather wait a week or two to see how domestic prices develop before committing to relatively expensive imported material.
One trader was trying to realise around €510/t delivered Germany for its stocked coil. Import offers to Italy are at around €490/t cif, but larger deals have been done at around €485/t cif. Spain has been a firmer market than Italy, with domestic mills achieving more than €500/t ex-works, but direction now appears less clear with large buyers holding back after placing import orders.
Across Europe domestic lead times are still short, but most mills are trying to realise some sort of increase nevertheless. And end demand, while not strong, is not as bad as the generally weak sentiment would suggest. Mill sources note increasing inquiries in recent weeks.
A European steelmaker played down the 4A quotas for non-passivated automotive hot dip galvanised from China and other countries being exhausted. With around 200,000t booked in February, substantially above last year's monthly average of around 110,000t, there is significant tonnage to arrive. The automotive slowdown also means there is sufficient stock on the floor already.
