European HRC Market Thrillingly Suspended: Mills Anticipate Price Boost in September

European steel hot-rolled coil markets are experiencing a temporary lull during the summer holidays, but there's optimism for higher prices in September as consumption rebounds and low-priced imports become scarce due to the swift uptake of EU import quotas. Despite the slowdown, producers remain hopeful and upbeat about the post-summer market outlook.

The daily steel HRC index in Northern Europe dropped slightly to €650.00 ($715.94) per tonne on August 1, down by €4.92 from the previous day. However, European mills anticipate a revival in apparent steel demand once the holiday season ends.

The rapid take-up of HRC safeguard quotas in the "other countries" category is providing additional support to the European markets. Major suppliers from Vietnam, Japan, Taiwan, and Egypt have already filled their quotas, ensuring that competitive suppliers outside the EU are excluded from the market.

Despite the summer lull, some buyers are still estimating tradeable values at €640-650 per tonne ex-works. Some German producers are offering November-rolling HRC at €700 per tonne ex-works, but buyers consider this unworkable.

Looking ahead, the market sources hold hope for a moderate consumption rebound in September. Although the construction sector remains sluggish, the automotive industry shows stability, providing some optimism for the HRC market.

Fastmarkets' daily steel HRC index in Italy saw a slight increase to €637.50 per tonne on August 1, indicating some resilience despite the summer closures at key suppliers.

Although the summer holidays have slowed down trading, the overall sentiment among European mills is positive. The expected restocking and import issues may pave the way for a price rise of €15-20 per tonne in September.

In summary, despite the current quiet market conditions due to summer holidays, European steel producers remain optimistic about the future. They anticipate a resurgence in demand once the holidays are over, and the swift take-up of EU import quotas is expected to limit low-priced imports, leading to potential price increases in the coming months.

Source EUROMETAL (Reporting by Julia Bolotova)