Domestic HRC prices in Europe set to rise further

European hot-rolled coil prices are expected to rise further this week, supported by reduced availability, good order books at producers and expected restocking, sources told Fastmarkets on Tuesday March 7.
European buyers have been awaiting higher offers from integrated mills, with prices not expected to be lower than €850 ($906) per tonne EXW, sources said.

Most mills are now only able to offer May production coil, Fastmarkets understands.

“There are some April [production] volumes [of HRC] if you are lucky, but generally its May already,” a trader source in the region said.

Market participants said they expect the higher offer prices to be gradually accepted in deals due to limited supplies and anticipated restocking.

“Trader stock levels are quite low [and] some cannot wait any longer—they need material. [But] producers feel no pressure, they have good order books,” a European distributor said.

Distributors said sales levels to end users in January and February were “normal”, despite experiencing some difficulties passing on higher prices.

“We have had a normal level of sales [to end users], enough inquiries to feel comfortable. The demand is there, it is not booming, but it is normal,” a steel service center source told Fastmarkets. “We have had some difficulties with increasing prices for end users, but they tend to accept [the increases] step by step.”

Buyers in the region said that a workable price in Northern Europe was about €800-820 per tonne EXW.

One integrated mill in the Benelux area expected to bring forward planned maintenance of one blast furnace to April rather than wait until summer, sources said.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €818.13 per tonne on Tuesday, up by €6.80 per tonne from €811.33 per tonne on March 6.

The latest calculation of the index was up by €24.38 per tonne week on week and by €63.13 per tonne month on month.

In Italy, meanwhile, the situation with supply was even tighter, sources said.

May-delivery coil from local suppliers was on offer at €820 per tonne delivered (about €800 per tonne EXW), sources said.

And July-delivery HRC from an integrated mill in the south of Italy was on offer at €850 per tonne EXW.

Buyer estimates of the tradable level came in at €780-800 per tonne EXW, depending on tonnage.

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy was unchanged at €795.00 per tonne on Tuesday.

The latest calculation of the index was up by €10.00 per tonne week on week and by €45.42 per tonne month on month.

Overseas HRC offers to Europe have been limited so far this week, with suppliers also considering price rises, Fastmarkets understands.

Offers from Southeast Asia to Italy were heard at around $800-820 per tonne CFR for May shipment, but the workable price was estimated by buyers at $780-800 per tonne CFR.

“The [overseas HRC suppliers] are trying to increase [HRC] prices, but customers are not accepting any increases and some sellers are finally willing to accept deals below the offer prices,” the trading source in Southern Europe said.

Long lead times were limiting buying interest in imported HRC, sources said.

In fact, several trading sources pointed, that booking imported coil would only make sense for “back-to-back” business, while buying it for stock would be too risky, given the high levels of volatility in the market.

Published by: Julia Bolotova