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.