European coils prices increase, capacity expected to return in Q2

The European hot-rolled coil market continued its upward rise as tight supply woes, extended lead times and sold out mills elevated prices further, with any relief in cost not expected by buy-side sources until at least the second quarter, market participants told S&P Global Platts Dec. 16.

Even those in seemingly more secure positions due to contracts are finding mills late with deliveries, or unable to fulfil them at all, with material increasingly hard to come by in the first quarter.

“I hope they stop [increasing prices] before Christmas,” an Italian service center source said. “Everyone is trying to put material back in their stocks. They are conscious prices could push up again.”

The Platts TSI index for North Europe increased by Eur7/mt on the day to Eur639.50/mt EXW Ruhr and the Platts TSI index for Italy went up Eur7/mt to Eur629/mt EXW Italy Dec. 16.

An Italian distributor source said the market was “booming” due to the supply issue, and warned it was not reflective of real demand.

“We received a call from the appliance sector, and they are looking for huge amounts of coils, they are begging for material. We are having difficulty delivering on time, the lead times are as far out as March-April,” the distributor said.

The source added that the assurance of long-term contracts was not enough to guarantee the timely delivery of material, and that most of the supply tightness was concentrated in those seeking galvanized material.

On Dec. 16, the remaining balance for HRC imports to the EU stood at 1.9 million mt (116%), the European Commission’s monitoring tool showed. Nearly 180% of the remaining balance was non-country specific.

Of the five countries with assigned quota, Russia’s allocation, the highest of all at 421,690 mt, had a remaining balance of 325,089 mt, India at 16,494 mt, Korea — 27,507 mt, and Serbia with 60,943 mt left.

Turkey’s allocation is nearing exhaustion, with just 934 mt remaining of an initial 344,891 mt, and 117,310 mt currently awaiting allocation at EU ports.

— Amanda Flint