Hot rolled coil market in Europe is still gloomy

The reason is that the economic situation in Europe has not improved.

According to The MetalMiner, the price of hot rolled coil in Western Europe has remained almost unchanged since the beginning of September until now. Many sources believe that the steel market will still be under pressure due to many factors including a decrease in demand. Currently public investment activity across Europe is still sluggish. Meanwhile, energy prices rose and consumer purchasing power declined in the face of economic uncertainty.

On September 23, flat steel price delivered in November traded around 740-750 USD/ton. This figure in early September was about 750 USD/ton, lower than the factory's desired price of about 800 USD/ton.

Even ArcelorMittal company previously offered $850/ton, but due to low demand, the company was forced to lower it to $810/ton the following week.

The price of HRC steel imported from Southeast Asian markets is also affected, in which the price of imported steel from Vietnam is about $680-685/ton for the January delivery contract.

Hot rolled steel coil is used in construction works and for making steel pipes. This item is also used as an input material for the production of cold rolled coil (CRC).

One trader thinks steel prices could continue to fall to around $620/ton by the end of the year even if fourth-quarter demand typically picks up cyclically strong. The reason is that the economic situation in Europe has not improved.

In response to the gloomy situation of the market, manufacturers in Europe announced plans to reduce crude steel output. Flat steel demand in Spain is currently around 8 million tons - 40% below average.

However, a positive signal is that energy prices in Europe are showing signs of cooling down. Accordingly, the Dutch price of TTF gas was at 187.6 USD/kWh at the end of September 21, down nearly 14% compared to 218 USD/kWh recorded on September 8.

This decline is largely due to the efforts of the governments of the European countries to increase energy prices and avoid supply shortages. The European Commission also plans to raise $138 billion in profits from energy companies and make mandatory cuts to non-essential energy use.

Europe's gas reserves are now above the five-year average, at 86%, even though Gazprom has indefinitely halted the flow of gas through the Nord Stream. The pipeline runs under the Baltic Sea from Vyborg in northwestern Russia to Lubmin in eastern Germany.

Vietnambiz