EU steel sections prices hold at 12-year high, mills target further hikes

European steel mills are expected to push for further medium sections increases in the near-term, amid strong order books, market participants told S&P Global Platts the week ended Jan. 20.

Platts European medium sections price (category 1, S235 JR) was assessed at Eur735/mt delivered Jan. 20, stable on week, holding at its highest level since September 2008 when the assessment was at Eur835/mt delivered.

One distributor source reported a deal for 2,000 mt at Eur730/mt delivered Benelux in the week ended Jan. 15, with near-term prices expected to rise as high as Eur760/mt delivered Benelux.

“Mills are moving end-user price up in steps,” the source said. “Our current sales price is just above the new purchase price and demand is ok but it’s creating a [price] gap for February end-user sales which will have been bought in January – so we’ll see.”

A second distributor in the Benelux region said there is higher resistance from buyers at these elevated levels, which makes it difficult to pass these prices on to end-users. The source cited existing offers already at Eur800/mt delivered Benelux.

“These are the prices we saw in 2008 but the situation is different now,” the second distributor said. “Major cities are on lockdown. And with winter and Chinese New Year in mid-February, capacity and consumption both will be reduced.”

The source also expected softening international scrap prices to put pressure on prices.

Market sources cited shredded scrap prices for Southern European mills at around Eur350-Eur355/mt delivered in January, as remaining mills settled their monthly contracts. Platts’ assessment for southern European shredded scrap was at Eur345-350/mt delivered for January contracts on Jan. 11, up from Eur280/mt delivered in December.

However, Platts assessed the benchmark Turkish import premium heavy melting scrap 1/2 (80:20) index at $440/mt CFR Jan. 20, down $5/mt on day, and down sharply from a near 10-year peak of $482.50/mt CFR on Jan. 4.

One European mill source put tradable levels for medium sections at Eur730-Eur740/mt delivered, citing an overall bullish sentiment in the market.

“Today there is more room for customers, room they didn’t have in November and December,” the mill source said. “Now they can wait before placing orders but still order books for mills are pretty good.”

— Rabia Arif, Staff, Viral Shah