EU coil prices rise, further increase expected in September

European coil prices inched higher in the week to 1 August amid the holiday season, with market sources seeing the market as primed for further price increases post-summer. 

Northwest European hot-rolled coil (HRC) offers appear to have centralised around EUR 580-590/t ex-works or delivered, though market participants on both sides deny that trading activity is yet possible at said levels.

A North European steelmaker reported bids rejected at EUR560/t ex-works, seeing realistic price levels at a EUR570/t minimum, but some sources still see prices as low as EUR540/t ex-works as achievable from integrated mills with gaps remaining in their August-September production schedules. Deals for October delivery were indeed considered workable at a EUR560-570/t ex-works or delivered minimum. The lowest offer reported was at EUR560/t delivered in Benelux, the equivalent of EUR550/t ex-works.

Liquidity in the market remains thin as the summer season enters full swing: downstream cold-rolled and hot-dip galvanized coils are exhibiting similarly stable pricing, offered between EUR660-690/t ex-works or delivered, and considered tradable by most sources between EUR650-670/t ex-works – though some still perceive opportunity to secure prices as low as EUR630/t for cold-rolled and EUR 645/t ex-works for hot-dip galvanized, respectively.

In Italy, domestic prices were reportedly slightly higher on week – with offers at similar levels to North Europe – but actual trading prices lagged, cited at EUR530-550/t ex-works by sources.

Domestic producer Acciaierie d’Italia (ADI) made progress on its revival at the end of last week, as the Italian government renewed environmental authorization for the site, allowing the restart of idled furnaces to continue production at ADI. As per the terms of this latest authorization, steel production at ADI will be capped to 6 mt. ADI is currently operating one furnace, with pig iron capacity of 2.3 mt.

In the international market, import prices have increased, potentially supporting bullish sentiment for the near-term: Turkish material is available at EUR535-540/t CFR Italy, anti-dumping duty-inclusive, alongside Algerian steel at EUR530-540/t CFR.

Both origins were viewed as ‘safe’ by buyers due to delivery before the Carbon Border Adjustment Mechanism (CBAM) enters its definitive stage in 2026. Indian imports were reported at a EUR500/t CFR minimum, but associated lead times are longer – some sources also suspect that exporters are close to exhausting their safeguard quotas.

As import lead times approach the end of the year, and face duty liabilities under the CBAM and potential safeguard revisions from January, European steel distributors will have little option but to source material from the domestic market come September, when restocking activity is expected to resume post-summer for fourth-quarter deliveries.

“It is getting harder to import,” said an Italian distributor. “Distributors need to make sure that any CBAM costs can be passed onto end-users.”

As such, many have taken advantage of current import competitiveness as far as possible – “prices are relatively stable at the moment, everyone is waiting for September restocking,” said a mill source. “Buyers are gorging themselves fat on imports while they can but their options will dry up next month.”

A North European distributor confirmed, having ordered over 10,000 t of Indonesian material in the last week. The source said Indonesian exporters claimed the load would be the last available to Europe before CBAM duties threaten their competitiveness, but did hear additional volumes still available as of this week. Safeguard measures do not apply to HRC exports from Indonesia.

Green Steel

The green steel market remains slow as the market awaits regulatory clarities toward the end of the year – namely CBAM benchmark values and lead market support as signalled by the European Steel and Metals Action plan.

Spot green HRC premium indications were rangebound on week at EUR75-100/t for scope 1-3 material of 0.7-0.8t carbon content, with mass-balanced material offered at similarly stable premiums of around EUR60/t for a 20% reduction from standard 2mt emissions levels. McCloskey’s reduced carbon marker – which calculates the value of a single unit of carbon reduction in reference to all surveyed green HRC premia – inched down to EUR59.13/t on week.

European distributors were heard stocking up on low-carbon imported material – particularly from Turkish electric-arc furnace producers – though end-users remain reluctant to pay premiums for green steel without a regulatory or pre-defined self-imposed decarbonization impetus.

European coil and green steel prices

Benjamin Steven Journalist, Steel
Maria Tanatar Associate Director, Steel and Green Steel

opisnet.com