EU HRC producers to achieve higher prices

European steelmakers are expected to reach higher domestic prices for hot-rolled coil due to short supply, sources said March 17.

The volume of average deals, however, is expected to remain smaller as buyers remain uncertain that the uptrend would sustain in the third quarter. And the European steelmakers have already been offering June-July delivery coil.

Reduced domestic availability and long lead times for import have been supporting coil prices in Europe. Tight supply has been caused by continuing effects from production stoppages last year, technical issues at some mills including Tata Steel in the Netherlands and some automotive steel demand revival. Tata Steel Nederland invoked force majeure due to difficulties following its Cold Mill 21 upgrade, the steelmaker had said Feb. 24.

Earlier this week, ArcelorMittal increased its HRC offers to Eur870/mt ex-works Ruhr, up by about Eur20-30/mt from the previous rates. Other steelmakers have either already been targeting similar prices or expected to return to the market soon with higher offers.

“Prices will continue to rise this month and most likely in April, buyers simply do not have alternatives,” a service center said. “It seems that next month the mills will move offers up to Eur900/mt ex-works.”

The numbers of deals and the volumes traded, however, have remained low as the buyers have been avoiding the bookings of bigger lots.

“Nobody knows what the third quarter would bring – most likely a price decline, as it is usually happens during summer,” a trader said. “Now mills do not feel pressure to sell due to full order books, but when they feel pressure to sell – they will for sure give the discounts.

Platts assessed domestic hot-rolled coil prices in Northwest Europe at Eur850/mt ex-works Italy on March 17, unchanged on day.

Deals have been heard at Eur850/mt ex-works Ruhr, offers – at Eur840-870/mt ex-works Ruhr and tradable values – at Eur840-850/mt ex-works.

One German service center also estimated tradable value for bigger volumes of HRC at Eur820-825/mt ex-works Ruhr.

Platts assessed domestic prices for hot-rolled coil in South Europe at Eur820/mt ex-works Italy on March 17, stable on day.

The assessment was based on deals heard at Eur800-820/mt ex-works Italy and offers reported at Eur850-870/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar