Steel News: Imports Put Bearish Pressure on European Steel Mills

Christopher Rivituso | Posted on May 29, 2023 |

Market participants report that prices for hot rolled coil in northern Europe continues to decline. The cause for the alarming steel news mainly concerns pressure from imports. Additionally, low demand and oversupply have been contributing factors in price fluctuations, with the problem persisting since early April.

"The problem is not with Germany, but rather with Asia," one trader told MetalMiner. Indeed, oversupply by China in Q1, a slower-than-expected pick-up in that country's economy over time, and a muted outlook for H1 have all contributed to the issue. Sources say the combination of factors prompted European mills to officially seek €750 ($810) per metric ton EXW for August rolling / September delivery. That price represents an 8.5% decrease from late April, when mills offered the flat rolled product at €820 ($885). Meanwhile, cold rolled coil carries an average premium of about €100 ($110) over hot rolled coil.

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While mills continue to hold fast on their current offer prices, the trader said they would likely come down further, meaning buyers are likely to find deals. "They need to sell their stocks," that source said about European mills.

South Korean mills are also offering €610-650 ($660-700) per metric ton CFR Europe. However, one end-user was able to secure 10,000 metric tons at €595 on the same terms for September delivery. There was also one report of a Japanese mill having sold volumes into Europe at €660 ($710) per ton CFR Europe. Vietnamese mills are also quieter than expected at this time, though the source declined to say why.

European mills could nonetheless attempt to increase their prices going into the continent's autumn as end users will try to stock more materials for October, the source noted.

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