EU HRC: Larger mills pull back, prices rise

London, 17 January (Argus) — European hot-rolled coil (HRC) prices rose further today, as some major mills withdrew from the market and others hiked their quotations. Argus’ headline Italian HRC index rose by €12.50/t to €722/t ex-works, while the daily northwest EU HRC index increased by €13.75/t to €744/t ex-works.

The twice-weekly cif Italy HRC assessment increased by €15/t to €685/t, while the weekly cold-rolled coil (CRC) assessment was up by €50/t to €800/t ex-works.

One mill has this week offered HRC at €750/t ex-works Italy, and another at €750/t ex-works. Buyers reported receiving offers at €750-760/t ex-works.

Sheet offers were heard at around €850/t ex-works from one seller, and around €25-30/t higher for pickled and oiled sheets. Sources said this seller was struggling to find competitive HRC supply, which pushed up its quotations. The company bid a north African mill around $720/t cfr, but the producer was off market and has not returned for April rolling yet.

Larger European producers have withdrawn from the market and are widely expected to return close to €800/t. An executive at one of the mills placed value at €775-780/t, citing import offers of around €725/t cfr.

In the north, a Visegrad-based mill reported sales of around €755/t on an index equivalent, while another eastern European producer said it was achieving close to €800/t delivered in central Europe.

Service centres (SSCs) expect to lift prices for sheets up to €850-860/t, having last week offered at €830-850/t delivered, following its increase.

Sentiment remains firm and most market participants are bullish on the direction of prices, despite the fragility of the recovery. SSCs report having purchased enough for the time being and are not jumping to book at the new offer levels. Nevertheless, there is an understanding from most that mills are unlikely to negotiate right now. Many said they would purchase at current levels as they expect further rises.

Some said the market has been turning more in favour of sellers so far this year, but there is uncertainty if that will continue in the second quarter.

Buyers expect mills may try to maintain prices at current levels for the rest of this month before they attempt to push over €750-800/t ex-works.

Naturally, the question of whether import prices will continue increasing, or at least stabilise, remains. Today, buyers reported offers at the equivalent of €700/t cfr were withdrawn in the morning, and they were expecting sellers to come back later in the week with an increase of €25-30/t. One mill was heard to have been offering pickled and oiled coils at €730/t cfr, but volumes were limited and it is unlikely that this is available any longer.

Offers for CRC in the domestic market were heard at €820-830/t ex-works. The differential with import prices was wider than the differential between domestic and imported HRC, with CRC offers from Asia at €740-750/t cfr Italy for March-April shipment, although some expect that these offers will move up too.

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