EU coil buyers delay purchases amid low import offers

A softer tone continued to prevail in the western European coil markets today, as buyers postponed purchases amid lower import prices.

Turkish hot-rolled coil (HRC) imports to southern Europe were quoted at around €500/t cif, below the levels of domestic mills. One southern European steelmaker was offering at €525/t ex-works while another was below this level — although its sales prices could increase.

Imports to the north were as low as €515-520/t cif Antwerp, substantially below recent mill expectations; market sources concurred that HRC was tradable in the €565-570s/t range on a parity point Ruhr basis.

Buyers were looking at these lower prices from Turkey and India and opting to delay procurement decisions as a result.

"Turkey has been a pin for sure, the speed at which they've been decreasing prices reflects the trouble they have domestically and apart from customers questioning our [European] expectations, it has put a chill on purchasing," one source said.

Those buyers that can get through the fourth quarter on their existing inventories may well do so as they await further clarity over forward direction. Of course, this could lead to a snap-back in the seasonally stronger first quarter if stocks get whittled down dramatically; total steel stocks in Europe's largest market of Germany were around 2.5mn t in August.

At the same time, northern European sellers do not seem particularly hungry to hunt for tonnage, with some conducting contractual talks for next year. Besides the evidently weaker auto sector, sell-side sources suggest end-demand remains strong.

Hot-dip galvanised pricing was around €660/t ex-works. The product has flipped from being the strongest of the ferrous suite for much of this year to the weakest, given disruptions to automotive production in Germany.

There was a huge bounce in Chinese hot-dip galvanised imports on a year-on-year basis over June and July — perhaps because of lower volumes last year ahead of the anti-dumping decision. But overall, Chinese hot-dip galvanised shipments to the EU are down exponentially this year, from 1.69mn t over the first seven months of last year to 725,149t over the same period of 2018.