Domestic prices for hot-rolled steel products in Europe decreased slightly on May 1, reflecting continued pressure from low demand and concerns about oversupply in the market.
Despite the continued decline in prices by domestic enterprises, the interest of buyers remains limited.
" Enterprises are trying to secure orders for May by lowering prices for raw materials. Prices are high, but buyers buy only small batches to meet their immediate needs", - said a distributor source. "Service centers in Germany suggest that factories should reduce production to prevent a potential collapse in prices."
Service centers in Germany remain pessimistic about any short-term recovery in demand, especially given that the current holiday period is reducing activity. It is reported that the volume of orders at domestic enterprises is low, and there are no signs of improvement in the situation in the near future.
"It's the holiday period now, so it's quieter here. Demand will not change either next week or in two or three weeks, so it is also a big problem for domestic factories to have a good order portfolio", - said a source at the service center. "The supply is good, but the real problem is demand, and I hope that we will see more stable prices before the summer holidays, but it will not be easy."
The same source also expects the import market to be more active, while the domestic side is experiencing difficulties, especially as factories are showing increased flexibility in price negotiations, further undermining pricing in the domestic market.
Although imports are expected to be more active, one trader noted the activity of only some "major players". and uncompetitive prices in Indonesia - about 560 euros per ton CIF in Italy for 30,000 tons.
Platts estimated HRC ex-works in Italy at 620 euros per ton, and HRC CIF in Southern Europe at 530 euros per ton, which is stable from day to day.
On May 1, Platts estimated HRC in Northwest Europe at 650 euros per ton at the Ruhr plant, and HRC imports in Northern Europe in Antwerp on May 1 amounted to 540 euros per ton, which is 5 euros lower than the previous day.
.Platts is a member of S&P Global Commodity Insights.
Alexander Wong
spglobal.com
