EU HRC: Market rises as ArcelorMittal increases offers

European hot-rolled coil (HRC) prices climbed today as Europe’s largest producer ArcelorMittal raised offers, and others said they would follow suit.

ArcelorMittal raised its offers by €50/t to €800/t for HRC and €920/t for hot-dip galvanised and others said they would also increase prices by a similar magnitude for April deliveries.

Reaction to the announcement was mixed, but even buy-side sources agreed that the tradable value was now more than €700/t in the north.

Some said mills were not as full as they had been suggesting, with February deliveries already ready, but others said output remained low and that producers still had backlogs. UK buyers said a vessel meant to arrive in November was only just berthing, with some mills in Germany and France full for the first quarter.

One large north European mill said it had no HRC to sell until February, when it will open April rollings in a restricted volume. Another large mill said it would follow ArcelorMittal in increasing for April, but has not yet decided on a price level. Buyers were particularly concerned about 2m-wide supply, given domestic constraints.

A service centre said it bought some Indian 2m-wide HRC for March arrival at €710/t cfr via a trader. Other offers were reported at about €640-650/t cfr for black HRC from an Indian mill. Some said they were cautious about placing offers, as they expected many buyers could turn to India with the other countries’ quota full, potentially causing issues for the Indian quota in April-June.

Argus’ daily northwest EU HRC index increased by €15.25/t to €707.75/t ex-works today, while the daily Italian HRC index rose by €3.25/t to €692.50/t ex-works. The twice-weekly cif Italy HRC assessment inched up by €2.50/t to €647.50/t, while the weekly cold-rolled coil (CRC) assessment increased by €10/t to €780/t ex-works.

A major Italian producer had not made any offers today, but participants expected that it would seek well above €700/t ex-works, after ArcelorMittal’s increased offers. Another Italian producer, whose production capabilities were unclear, was offering March delivery HRC at €720/t base delivered, although not many were considering buying from the seller.

Last deals closed in Italy stood at about €700/t base delivered, market participants said, from a variety of EU sellers, although expectations are that in today’s market, at least €10-20/t higher would be achievable.

Some import offers started emerging too — Indian HRC was offered at €650/t cif Italy, and pickled and oiled at €680/t cfr. A Turkish HRC offer was heard at $730/t cfr, excluding duty — inclusive of duties, this would be below ArcelorMittal’s current HRC offering, which could open some sales opportunities for Turkey. CRC from Korea was offered at €735-750/t cfr depending on the seller, and from India at €730/t cfr Italy.

Some buyers expect that Indian offers across products will move up soon, but at the same time domestic demand prospects in the country are not very bullish, which could continue keeping prices workable for EU markets. Expectations of safeguard duty on April arrivals under the ‘other countries’ quota is expected to dissuade buyers from purchasing from other Asian suppliers.

A domestic Italian CRC offer was heard today at €790/t ex-works. One producer said it was sold out of CRC until April.