EU HRC prices set to rise on anticipated restocking, higher offers

European domestic prices for hot-rolled coil are expected to gradually rise as buyers expect to start restocking soon, sources said March 1.

ArcelorMittal has increased its coil offers by Eur20/mt across Europe. New offers for HRC in Germany reached Eur840/mt ex-works Ruhr and in Italy, at Eur820/mt delivered.

The positive mood in the market has been supported by a combination of good order books from the mills, a lack of competitive import offers, and an anticipated rise in demand.

The majority of the European steelmakers have already been offering May shipment HRC. The scheduled restart of some idled furnaces in March-April will not have an immediate impact on supply and prices, sources said.

Import offers have been available only for material from Asia with delivery in July-August, making more buyers turn toward European mills for orders.

“Only import you can get is from Asia and the lead times are long,” an Italian service center said. “Turkey is not exporting and will not export for quite some time after the earthquake. So buyers will focus on domestic purchases and would book limited volumes from overseas.”

Demand from end consumers has remained stable and a significant increase is unlikely in current economic conditions, according to the estimations of market sources. Distributors, however, have lower stocks of flat steel products and they would need to return to the market looking for orders soon.

“Now we do not have many orders, but it seems that the buyers would need to restock in a couple of weeks and then the prices will rise,” a European steelmaker said.

Platts assessed domestic HRC prices in Northwest Europe at Eur805/mt EXW Ruhr March 1, unchanged.

The assessment was based on deals reported around Eur800/mt EXW Ruhr, tradable values heard at Eur800-820/mt EXW Ruhr, and offers at Eur820-840/mt EXW Ruhr.

In Southern Europe, Platts assessed domestic prices for HRC at Eur785/mt EXW Italy March 1, up Eur5 on the day.

Transactions and tradable values have been reported at Eur780-790/mt EXW Italy and offers at Eur800-820/mt EXW Ruhr.

The number of import offers has been limited, exporters from Asia are expected to return to the EU market with higher offers next week.

Offers of HRC from India have been heard at Eur740/mt CIF Italy and from the Far East at Eur750-760/mt CIF Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar