EU HRC stable, prices expected to rise in Q2

The EU hot-rolled coil market was unchanged Feb. 18 as buyers reported sufficient inventories and costs remained high. The market expects prices to rise in Q2.

The daily Platts TSI index for HRC for Northern Europe was stable on the day at Eur960/mt EXW Ruhr, with the daily Platts TSI index for HRC Italy also stable at Eur915/mt EXW Italy.

A service center source reported full order books largely tied to contract allocation, forecast to last until midyear. According to a mill source, the market is dealing with low end-user demand and long lead times.

Domestic mills stayed firm on higher price levels. A service center source reported an offer heard at Eur1,000/mt, Eur80 higher than a confirmed deal heard on the day.

“The difference between contract and spot prices now is a huge problem … we’re dealing with contract prices Eur60-80/mt higher than on spot,” a mill source told S&P Global Platts.

A service center source also said that the newly added CO2 surcharge to offer levels played a considerable part in the price increase. It was added to offer buyers more transparency. Imports remain unpopular in the European market, with high freight costs and transport delays encouraging a domestic focus.

The impact of geopolitical tensions on steel global supply continues to add to existing near term pricing uncertainty, as if Ukraine’s 4 million mt/year of exports to Europe are affected, then some upward pressure on steel prices is inevitable, sources said.

— Benjamin Steven