Domestic prices for hot-rolled coil increased in Europe on Jan. 25 due to domestic steelmakers’ full orderbooks.
European mills have sold out first-quarter rolling material and were aiming for higher prices for Q2-production coil.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up to Eur760/mt ex-works Ruhr on Jan. 25, up Eur5 week on week.
A Germany-based steelmaker settled a deal for Q2-production HRC with a local buyer at Eur760/mt ex-works Ruhr. The same mill was aiming for Eur800/mt ex-works Ruhr.
The majority of market participants estimated achievable prices at Eur750-Eur760/mt ex-works Ruhr, and they also believed that those prices would no longer be available soon, as mills have been insisting on Eur780-Eur800/mt ex-works Ruhr.
“I think Eur750/mt ex-works Ruhr is still realistic for HRC, but I believe that the prices will move close to the offers of Eur780-800/mt ex-works,” a Germany-based trader said.
A Northern Europe-based source reported deals at Eur720/mt ex-works Northern Europe, but the price was not reflected in the assessment because the sales were made outside the Ruhr area in Germany and information about sales was not widely confirmed in the market. Some sources suggested that such prices were only available ex-warehouse in the Benelux area for imported material booked in 2022 at lower prices.
One source also said that a Northern Europe-based steelmaker was offering a limited range of coil products at prices about Eur50-Eur80 below market offers, but that the price was not representative in the current bullish market.
Price assessment for domestic hot-rolled coil in South Europe increased Eur10 day on day to Eur745/mt ex-works Italy on Jan. 25.
The assessment was based on offers reported at Eur740-Eur750/mt ex-works Italy and tradable value reported at Eur750/mt ex-works Italy.
The bullish mood in the market had been driven by a combination of reduced availability, caused by a combination of some apparent demand revival and production cuts in 2022, as well as an anticipated rise in prices in Asia after China’s steelmakers will return from Lunar New Year holidays.
Some Europe-based buyers, however, were concerned that end-user demand might not recover enough to support the price rise. In addition, the buyers were uncertain about the sustainability of the upward trend if more steelmakers decide to restart the furnaces that were idled last year.
“[The] point is that some mills are going to restart idled blast furnaces again, following US Steel Kosice [in Slovakia] and ArcelorMittal Spain, and after certain time mills will end up under pressure to sell capacity,” a Germany-based distributor said. “But in terms of demand, I do not see significant increase, for construction, I guess situation will become worse. At least in Germany a lot for projects are postponed or cancelled due to higher material cost and increasing interest rates.”
The majority of sources, however, believed that demand recovery would be strong enough to support the price rise, and that mills would maintain production under control.
“Spanish mill restarted mainly to solve some logistics problems, and not to add significant volumes in the market” a second Germany-based distributor said. “And Slovakia mill has high production costs, they will support the price recovery. Restart of any other equipment would take time, it would take at least a couple of months.”
Platts is part of S&P Global Commodity Insights.
— Maria Tanatar, Benjamin Steven