Lead times in the northwest European and Italian hot-rolled coil (HRC) markets continue to dampen prices as mills cut prices to fill rolling programmes.
Continuously muted demand from the automotive sector has seen bookings in Italy revert to as low as €460/t ($520/t) ex-works over the past week, although some note the market has bottomed, and small supply sales are still being concluded at around €470/t ex-works.
Buyers have remained unswayed, despite EU mills' efforts to raise prices following Brazilian mining firm Vale's fatal dam accident in Brazil at the end of January, and lower demand from both the automotive industry and service centres has seen sellers accept levels substantially below offers. Data from the German auto association VDA show new passenger vehicles registrations in the EU continued to fall in February, reaching 1.1mn units — down by 1pc year on year — as a fall in Italy and Spain outweighed an increase in Germany, France and the UK.
The Argus daily northwest EU HRC index fell by €1.75/t to €505.75/t ex-works today. The ex-works Italy differential narrowed to €32.50/t as a result.
Weather disruptions in Australia are causing concerns among European producers about coking coal supply, but could provide support to HRC prices. But the Argus daily fob Australia premium hard low-volatile assessment is down by $2.50/t to $208/t today.
Imports concluded at around $520/t fob Turkey two weeks ago have brought the market to a standstill.
Import offers are now around €480-490/t cif Italy, but buyers are reluctant to book at such levels.
