(c) shutterstock.com

As of June 24, the HRS index from Argus was €784.5/t compared to €1350/t in mid-March

The daily Italian hot-rolled index (HRC) from Argus on June 24, 2022, fell by 41.9% compared to the maximum reached three months earlier (€1350/t), to €784.5/t, ArgusMedia reported.

Prices for hot-rolled sheets have fallen even more. Earlier this year they reached €1600/t high, while now the supply of metal is made at a price below €1000/t. Sales of €960-980/t with delivery are reported.

From February 23 to March 23, 2022, the HRC index increased by €464.25/t. This volatility now affects the market and customer sentiment. The downward trend and uncertainty in prices is forcing buyers to leave the market for a few weeks, reducing liquidity and demand.

Due to the lack of market demand, only small contracts are concluded, which does not fully reflect spot prices. More and more Italian traders and end buyers are considering adjusting contracts due to the lag of indices from real prices.

Low demand leads to increased inventories of factories and traders. Some plants report a 30% drop in sales compared to March-April 2021. The year-on-year comparison looks even worse. Negative margin in these months will nullify the income of the first months of the year.

Earlier GMK Center reported that the steel prices in Europe are declining amid a slowing economy and declining demand for products whose inventory were replenished after Russia’s invasion of Ukraine. The hot-rolled roll has fallen in price by almost a third since reaching record highs in March.

Analysts expect that the prices of hot rolled roll will fall by another 100-150/t over the next two months amid seasonally weak summer demand. At the same time, prices will remain at a level that is much higher than in the previous 10 years, when the rental price was about € 600/t.