European HRC prices remain mostly stable in February
LONDON (Scrap Register): European HRC prices remained mostly stable during February this year, as many buyers stayed away from the spot market, instead choosing to work through their inventories, reported the Steel Index.
Large North European steel producers held their asking prices for HRC between €580-590 a ton while smaller mills were ready to offer discounts to complete their April order books.
The European HRC indices were range-bound in February, as increased offers from steel producers were largely rejected by buyers, and trading activity remained muted.
In Northern Europe, tier-one producers kept their HRC asking prices close to €590/ton, but this failed to translate into higher spot prices. Buyers reported that they had purchased enough material last year, meaning there was no pressing need to book large volumes in February.
This kept demand for spot material at low levels. Smaller steel producers were reportedly still looking for orders for April rolling, and were asking as low as €550-560/t for larger volume bookings. As a result HRC prices remained fairly stable during the month, with trades completed mostly in the €560-580/t range.
Similarly, service centers in Southern Europe noted that they had sufficient inventories and stayed on the side-lines for much of February. It was reported that Italian producer Ilva announced list price increases to its coil products in the middle of February, taking HRC offer prices to €550-560/ton.
However, this had only limited affect on the spot price level, as HRC continued to be trading between €530-550/t, with the majority of trades taking place in the lower end of the range.
HRC import offers heard during the month were set in the €520-530/t range for material from India and Turkey (CIF Italy/Antwerp basis) - a price level that did not pose any significant threat to domestic European producers.
The latest data from the German Association of Steel Distribution (BDS) showed increased inventory levels held by its members. Flat steel stocks in January totaled 1.46 million tons, increasing by 11% y-o-y, the highest level registered since July last year.
Flat steel imports into Europe in 2016 totaled 20.5 million tons (+10% y-o-y), data from the European Steel Association (Eurofer) showed. HRC imports were equal to 8.4 million tons in 2016 (+11% y-o-y), with December accounting for 599kt.
As volumes from China and Russia declined, Turkey became the largest HRC exporter with 113kt recorded in December. Similarly, coated steel and plate registered y-o-y increases in 2016, while CRC imports declined.
Data from the World Steel Association showed that the European crude steel output in January totaled 13.8 million tons (+2.4% y-o-y), registering a fourth consecutive y-o-y increase in production.
According to data from IHS Markit, European economy continued to expand: the Eurozone Manufacturing PMI reading in February published at 55.4, the highest level since April 2011. Out of individual countries, PMI readings in the Netherlands and Germany hit 70 and 69-month record levels respectively.