[SMM EU Market Weekly Review] Northwest European HRC Retreats from Its Peak as the Gap Between Offers and Deals Widens

[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.

This week, HRC prices weakened compared to the previous week, with overall trading sentiment deteriorating. In terms of supply, the impact from rolling line maintenance decreased WoW, and overall HRC production rebounded. On the demand side, apparent demand rose WoW, but the September-October peak season demand has yet to fully materialize. In terms of inventory, SMM data showed HRC social inventory across 86 warehouses nationwide (large sample) at 4.6625 million mt, up 21,100 mt WoW, or +0.45% WoW, and +28.06% YoY. By region, all regions saw inventory buildup except North China, which posted a slight destocking. On the cost side, the fifth round of coke price increases was implemented this week. Looking ahead, the sixth round of coke price increase negotiations has begun, and cost support for HRC remains intact. Combined with steel mills currently operating at a loss, mills are maintaining a relatively firm stance on prices, providing strong downside support. Although restocking demand is expected ahead of the Mid-Autumn Festival and National Day holidays, peak-season demand has not yet been confirmed. With demand pressure limiting significant upward movement, HRC prices are expected to consolidate at current levels next week, with the most-traded contract estimated to trade in the 3,280-3,390 range.

[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.