EU HRC producers insist on higher prices despite slow trading

European steelmakers are insisting on higher prices for hot-rolled coil despite buyer hesitation on positive trend sustainability and limited trading activity, sources told S&P Global Commodity Insights Feb. 15.

Earlier this week, ArcelorMittal and other European steelmakers increased offers to Eur820/mt delivered across Europe. The new offers were the equivalent of about Eur790-805/mt ex-works Ruhr and of Eur780-800/mt EXW Italy, according to estimations of market participants.

Buyers have been reluctant to accept the price increase, and trading activity remained limited.

The resistance of the distributors to accept the higher prices has been mainly driven by a combination of uncertain outlooks and the fact that they struggled to transfer the price increases to end-consumers.

“The distributors argue that they are squeezed between the resistance of end-users, such as [original equipment manufacturers], to accept higher prices despite good prices for finished goods and rising steel prices from the mills,” a German service center said. “Buyers book only absolutely required volumes as concerns remain high that prices would drop in the second half of the year.”

“It is not easy to push price rises for the material ex-distributor to end-users, so price rises for new material have also slowed down,” an Italian trader said.

Some buyers have also suggested that the mills would give discounts if they received firm bids. Such statements, however, have not been supported by information about any new transactions.

The supportive mood of the steelmakers has been driven by good order books, a lack of competitive import offers, and stable demand.

The European mills have limited volumes for April rolling HRC and a majority have already been trading May production material.

Platts assessed domestic prices for HRC in Northwest Europe at Eur785/mt EXW Ruhr Feb. 15, up Eur15 on the day, based on tradable values reported at Eur760-800/mt EXW Ruhr and offers heard at Eur820/mt delivered Ruhr.

The assessment for the import HRC prices in the region rose by Eur10 to Eur750/mt CIF Antwerp Feb. 15. Import offers for Asian material have been heard at Eur740-770/mt CIF Antwerp.

Platts assessed domestic prices for HRC in South Europe at Eur770/mt EXW Italy, up by Eur10.

Market sources reported tradable values at Eur750-780/mt EXW Italy. One source reported deals at Eur760-770/mt EXW Italy. Italian mills have been offering HRC at Eur820/mt delivered.

Import offers, in the meantime, have been reported at Eur740-770/mt CIF for HRC from Asia.

Platts assessed prices for imported hot-rolled coil in South Europe at Eur750/mt CIF Italy Feb. 15, up by Eur10.

Import prices need to be about Eur70-100/mt below the domestic coil prices to spur buyer interest, according to market sources.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar