Press releases

HRC prices in Europe touch €500-510/t base - 25 May 2012

Sources in the European coil market continue reporting mixed views. While everyone agrees the market is slow due to the reluctance of buyers to place orders at the moment, the pricing picture remains uncertain.

Mills are continuing to try to hold their selling levels relatively firm, suggesting possible new capacity idling in the coming weeks, but some buyers and traders in the market reported the first offers received around the €500/tonne ex-works mark for hot rolled coil.

A purchasing source in Western Europe stressed that a mill based in Northern Europe (considered to have considerable cost advantages) this week hinted at the possibility of selling HRC below €500/t ex-works, while maintaining officially the offer levels at €500-510/t ex-works. The source added that a purchase at around €495/t ex-works is to be considered feasible at the moment, for a large order.

Another service centre source in Benelux couldn't confirm these offers, but reported major European mills offering at €530/t base this week. "From the information I have it could be coming from southern Europe," he added, stressing the outlook remains for further price corrections.

Meanwhile a senior trader and a purchasing manager at a service centre in Europe confirmed that the “workable price” for HRC in Europe at the moment is to be considered €500-505/t ex-works. Nevertheless another service centre source in southern Europe said that prices below €510/t ex-works have not been heard in the market yet.

Mills remain reluctant on the possibility of lowering prices further, as sources report a number of European suppliers refusing bids below the €510-520/t mark. Going forward a number of producers could decide to lower the capacity utilisation further to balance the currently weak demand in the market.

 

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