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European Hot Rolled Coil Price Faces Challenges as The Demand Lowers Amidst Market Uncertainties
European Hot Rolled Coil Price Faces Challenges as The Demand Lowers Amidst Market Uncertainties

European Hot Rolled Coil Price Faces Challenges as The Demand Lowers Amidst Market Uncertainties

  • 28-Feb-2024 12:20 PM
  • Journalist: Li Hua

In the week ending February 23rd, the price of Hot Rolled Coil experienced a declining price trend in the European spot market as the demand shortened amidst buyers lowering their orders due to the hesitations in the steel market. Meanwhile, the production in the European mills is on a higher edge leading to an increased inventory level in the captive market. The expansion of the Hot Rolled Coil mills of Habas A.S, in Turkey in November ending 2023 has pushed the production rate further northward. ThyssenKrupp has also planned to provide Hydrogen for the DRI plant in Duisburg, Germany, promoting the green steel scheme of the European Union. Furthermore, the closure of the TATA Steel plant at Port Talbot, along with a reduction in import quotas in the UK has been a major concern for Hot Rolled Coil among the market players in the European spot market.

The production of Hot Rolled Coil across the European spot market has surged as several plants expanded their production rate. The Romanian Liberty Galati plant has restarted its blast furnace no.5, which was previously closed at the start of the first quarter of 2024. The UK's anti-dumping authority suggests lifting import restrictions on certain steel items following the closure of blast furnaces at Port Talbot. The Trade Remedies Authority proposes suspending safeguards on hot-rolled flat and coil steel imports for nine months, currently imposing tariffs of 25% on imports exceeding a set quota. Furthermore, the expansion of the Turkish Habas A.S’s hot strip mill (HSM) to a high-capacity HSM has been successfully finalized. These considerations led to an overall surge in the production rate of Hot Rolled Coil in the European market. Regarding demand, the consumption of Hot Rolled Coil from the downstream automotive industries has been facing a lack of interest from domestic buyers as the purchase rate dampened after the removal of subsidiary support on EV prices by the German government. The consumption from the captive market has been lowered as the buyers remain uncertain amidst price and supply uncertainties. These mentioned factors provoked the mills to lower their price for Hot rolled coil in the European market for the second half of February 2024.

According to the Analysis by ChemAnalyst, the future price for Hot Rolled Coil is anticipated to remain on a plunging trend as the demand outlook shows uncertainty. Furthermore, the demand from the downstream Automotive sector has been facing a crucial period since the German government revoked the incentive subsidiary support for electric vehicles, resulting in a reduction in sales rate from European consumers. The market is anticipated to remain uncertain, keeping the price for Hot Rolled Coil on a declining trend in the forthcoming weeks.

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