EU HRC market looks to alternate supply sources

There was less optimism in the EU coils market March 14 as market participants struggle to find alternatives in upstream supply chains.

A northern buyer source reported reduction in demand, against the bullish pricing trend.

“Prices are rising very quickly but who is buying? Demand seems to be vanishing with the automotive industry and now customers are cutting reserved material – it is difficult to be optimistic,” the buyer said.

Demand may not be as strong given relatively high inventories in the northern market, a service center source said adding they were forced to delay or cancel orders due to supply chain illiquidity.

“It really is a mess. Slab is in such tight supply and even where it is offered there is no guarantee it will arrive,” said the source. “Last week we revised our orderbooks to inform customers of what material will arrive, arrive late, or not at all.”

Liberty Ostrava announced a Eur125 surcharge on all flat-rolled products in the week ended March 11, and sources reported a similar dynamic energy surcharge received from a major producer on the day.

Price increases are consistently tied to supply-side factors, such as energy costs, rather than end-user demand.

A Spanish trader source reported on the day that customers were “fed up” with re-negotiations, preferring to find new sources or take up firm offers.

Import offers were reported as withdrawn by multiple sources, with Asian mills reported by a service center source as postponing offers daily. The source speculated profit maximization as the primary factor, given rapid price developments across Europe.

S&P Global Commodity Insights’ Platts assessed hot-rolled coil for northern Europe up Eur20 on the day at Eur1325/mt ex-works Ruhr. HRC in the south was assessed stable at Eur1300/mt ex-works Italy.

— Benjamin Steven