"HRC Prices to Consolidate Amid Cost Support and Uncertain Demand, Inventory Edges Up"

[India Domestic] Domestic steel market continued to strengthen, supported by higher raw material costs, particularly scrap and sponge iron. Mumbai Rebar up by 1.04USD/tonne (100INR/tonne) to 531.79USD/tonne (50,900INR/tonne) EXW Mumbai. Ingot up by 3.13USD/tonne (300INR/tonne) to 489.96USD/tonne (46,900INR/tonne) EXW Mandi. Raipur billet up by 5.22USD/tonne (500INR/tonne) to 454.44USD/tonne (43,500INR/tonne) EXW Raipur. PDRI sponge iron up by 1.04USD/tonne (100INR/tonne) to 308.22USD/tonne (29,500INR/tonne) EXW Raipur. Bellary PDRI sponge iron rose by 4.17USD/tonne (400INR/tonne) to 320.76USD/tonne (30,700INR/tonne) EXW Bellary. In the Bellary, PDRI quotes are currently placed at 323.87USD/tonne (31,000INR/tonne). However, actual deals today are expected to be concluded slightly lower, in the range 320.74-321.78USD/tonne (30,700–30,800INR/tonne), participants noted. Mandi HMS 1&2 (80:20) up by 3.13USD/tonne (300INR/tonne) to 400.17USD/tonne (38,300INR/tonne) delivered Mandi.

[EU] EU hot-rolled coil prices remained broadly stable, with limited spot availability continuing to support mills’ pricing. The Northwest European HRC index edged down by approximately 1 USD/tonne to 854 USD/tonne EXW, while the Italian index rose by around 2 USD/tonne to 852 USD/tonne EXW. Northern European mills maintained offers at 870-893 USD/tonne EXW, although workable levels were generally assessed at around 841 USD/tonne EXW. Lower transactions at 829-835 USD/tonne EXW were reportedly available only to selected customers. In Italy, liquidity remained weak as buyers awaited greater clarity regarding Acciaierie d’Italia’s production outlook. Portside HRC was available at around 847 USD/tonne loaded, while existing imported stocks were offered at 835-858 USD/tonne DDP. Forward import offers exceeded 870 USD/tonne DDP as quota risks and upcoming CBAM requirements increased import costs. In the near term, restricted supply options may keep EU HRC prices firm, but weak downstream demand is likely to limit the acceptance of substantially higher mill offers.

EU HRC prices climbed early this week before entering a consolidation phase. The Northwest European index rose to €744.50/tonne EXW (approximately $864/tonne EXW) on Monday before easing to €736/tonne EXW (approximately $854/tonne EXW) by Friday, remaining broadly stable on the week. The Italian index settled at €734.25/tonne EXW (approximately $852/tonne EXW) on Friday, up €2/tonne on the day but little changed week on week, while gaining approximately €15/tonne from August 25. Transaction levels varied considerably. A northern European mill reportedly sold around 10,000 tonnes at €740-750/tonne EXW (approximately $858-870/tonne EXW), while a 2,000-tonne November-delivery lot in northern Italy changed hands at €750/tonne EXW, with larger volumes negotiable at €735-740/tonne EXW. However, actual transactions among core Northwest European buyers remained lower at €715-720/tonne EXW (approximately $829-835/tonne EXW). Mills’ November offers of €750-770/tonne EXW and test offers at €790/tonne EXW attracted limited acceptance, while portside material was available at €730/tonne (approximately $847/tonne, loaded). Supply-side disruptions remained frequent. ADI Taranto faced critically low raw-material inventories, while Metinvest Valsider, with combined plate and HRC capacity of 800,000 tonnes/year, ended its force majeure and was expected to resume production over the weekend. Europe’s blast furnace operating rate stood at 68.58%, while TTF natural gas prices approached €80/MWh, the highest level since December 2022. Import activity also picked up. Italy’s import assessment rose by €5/tonne on the week to €580/tonne CIF (approximately $673/tonne CIF), with Indian offers at €615/tonne CIF (approximately $713/tonne CIF) and Turkish offers at around $600/tonne FOB. Nevertheless, the 50% tariff on out-of-quota volumes and CBAM requirements for product-level emissions data continued to discourage firm bookings. First-quarter delivery offers were already seen above €750/tonne DDP (approximately $870/tonne DDP). Long steel markets diverged: Germany’s monthly rebar assessment fell by €17.50/tonne to €665/tonne DEL (approximately $771/tonne DEL), while Italy’s weekly rebar assessment increased by €15/tonne to €705/tonne EXW (approximately $818/tonne EXW). An industry survey showed that 44% of respondents expect Northwest European HRC prices to range between €750 and €800/tonne EXW (approximately $870-928/tonne EXW) in Q4. Outlook: Looking ahead to next week, import booking activity may accelerate ahead of the opening of the new quarterly quota window on October 1. Domestic HRC indices are expected to consolidate within €730-745/tonne EXW, with the direction of fourth-quarter contract negotiations remaining the key market driver.