European Hot Rolled Coil Prices Remain Stable in Early July Despite Production Cut

Hot Rolled Coil prices across Europe stabilized due to weakening demand from the downstream construction sector in the first week of July. The Hot Rolled Coil production cut has been observed at various mills as the demand from downstream construction and the automobile industry weakens. Meanwhile, the manufacturing activity at the ArcelorMittal Fos-sur-Mer plant in France has been restarted, leading to a minute surge in the supply of Hot Rolled Coils in the spot market. Additionally, the Dunaferr Iron and Steel Plant has now been occupied by Liberty Steel after the downfall of Dunaferr in December 2022. The downstream construction activity was on the lower verge in the European spot market leading to reduced demand for Hot Rolled Coils, and consequently, reduced Hot Rolled Coil prices were available in the spot market.

The ArcelorMittal Fos-sur-Mer plant, a major Hot Rolled Coil producer in France, was forced by the French Labor Inspectorate to implement shutdown from June 19th this year amid rising concern for the harmful carcinogenic gas emission that was adversely affecting the health of the workforce in the plant area along with the residents in the neighboring region. The plant authority was under process for the curtailment of production to idle the steelwork according to the regulatory orders that halted the supply of Hot Rolled Coil amid weak demand from the downstream construction sector in the French spot market. Meanwhile, a few days ago, the ArcelorMittal Fos-sur-Mer plant won the case against the shutdown of the plant, as the court stated that the plant authority could resume the manufacturing activity as they have already taken several measures to reduce the harmful emission of gases coupled with the production cuts since Q3 2022. In H2 of 2022, the ArcelorMittal plant in France spent USD 1.85 billion on a special upgradation project, especially for the reduction in gas emissions that included the shifting of plant dependency from the primitive Blast Furnace and Basic Oxygen Furnace production route towards Electric Arc Furnace production units. This project also helped increase Hot Rolled Coil's production rate across the European Spot market.

The Liberty Steel Industry has now occupied the Dunaferr Steel plant after the bidding process placed by the Hungarian government. After the downfall of the company and the announcement of bankruptcy, the Hungarian government started selling plant assets. As a ripple effect, the production rate dwindled, and the Hot Rolled Coils supply was reduced. Recently, Liberty Steel finally won the Auction of Dunaferr Steel at USD 60.5 million. During the degradation term of the Dunaferr plant in the past December, Liberty Steel has been helping them by shipping feedstock Coal and Iron ores from the US, Czechia, and Australia to the operational site. The possession by Liberty Steel uplifted the production rate of Hot Rolled Coil in the European spot market.

According to ChemAnalyst, the price of Hot Rolled Coil will remain Stable. The demand for Hot Rolled Coil from the downstream construction sector will be weakened as the heavy rainfall and uncertain economic situation reduce the construction and housing activity across European countries like Spain, France, Germany, and Poland. As a ripple effect, the Hot Rolled Coil prices will remain stable.