On the Asian and
American markets, prices for hot-rolled coils increased
Europe. European steel producers, according to S&P Global, are set to raise
domestic hot-rolled coil (HRC) prices as they expect demand to pick up in the
first quarter of 2023.
Such
deals have not yet been discussed, as buyers are currently focused on managing
inventory until the end of 2022.
Forecasts
for the beginning of 2023 are not unambiguous. Some sources believe that the
need to replenish stocks against the background of production cuts and high
energy costs will lead to higher prices. Others see this as unlikely, because
end-user demand will remain lower than usual and European distributors’
inventories remain adequate.
Fastmarkets European sources expect increase in prices on the market. At the
end of last week, most of them agreed that prices in the market had bottomed
out and were waiting for the producers to announce their increase before the
Christmas break. One insider predicts that in the first quarter of 2023, the
likely increase will be around €20-30 per ton. Companies are currently selling
material with rolling in January, but mills still need orders.
In
turn, sources among producers have confirmed the intention to raise HRC prices
in the first quarter of next year, but there are no firm offers yet.
According
to Platts, the HRC price in NW Europe on December 6 was €615/t ex-works Ruhr.
Buyers estimated the market price at €610-620/t ex-works.
China. Meanwhile, HRC prices in the Asian
market continued to rise this week on the back of an improving outlook. In
particular, HRC offers from China remained stable amid the strengthening of the
yuan against the dollar. A rise in Chinese export offers limited trading
activity as the bid-offer spread widened and overseas markets remained weak.
The situation in the country’s domestic market was stable.
India. Oil prices in India remained stable
at the start of the week due to weaker trading activity. In the coming weeks,
they are expected to decrease due to a possible oversupply due to imports.
According to traders, prices in the domestic market may fall to around 50,000
rupees per ton ($606.8) during this period. As of December 6, the ex-works HRC
price in Mumbai was 54.5 thousand rupees per tonne ($661.4), excluding 18% GST.
USA. In the United States, spot prices for
HRC have increased – mills announced their increase last week, reports Argus. Producers such as Cleveland-Cliffs,
Nucor and US Steel have raised prices by $60 since early last week. According
to the estimates of the sources, the American factories tried to keep the
offers in the range of $680-700 per ton. The move was expected by some buyers
as raw material, labor and energy costs rose. However, the majority was not yet
ready to buy products at a higher price.
“A
number of leading indicators point a possible recovery of demand from the
industry already in January-February 2023. The inventory level of distribution
centers is indeed below average, and replenishment is necessary to ensure sales
growth. Eurozone GDP in the third quarter of 2022 turned out better than
expected, so the consensus forecast indicates that the bottom of the economic
crisis will come in the first quarter of 2023. The crisis itself is currently
no longer called a recession, but rather stagnation. However, the demand for
steel should respond a little faster, i.e., already from the beginning of next
year,” noted GMK Center chief analyst Andriy Tarasenko.
As GMK Center reported earlier, the
European hot-rolled coil (HRC) market was marked by low demand in mid-November 2022, and
some mills were ready for significant discounts on supplies this year. Buyers
during this period were testing the market to see if prices had bottomed out.