European HRC buyers face difficulty due to credit limits, prices theoretical

European HRC prices were heard higher in the market April 26 as mills aim to reach the Eur1,000/mt level announced by ArcelorMittal, though players have said most prices that are discussed are purely theoretical, with further increases now said to be futile due to the limited availability of domestic steel, sources told S&P Global Platts.

According to one European mill source, Q3 orderbooks were heard to have been filled, with some customers now asking for Q4 allocations.

The mill source cited offers at Eur1,115/mt for HDG and said HRC was between Eur970-980/mt ex-works RUhr.

“It’s useless to announce another increase, the price is hiking up anyway,” the mill source said. “The fact is, when customer needs material, he will pay whatever.”

The market was watching the Chinese steel economy closely, as China is now importing more than it is exporting for its own home production.

“As long as China does not export, the world market will not have enough and [high] prices will remain.”

A German mill source said HRC prices were at Eur1,000/mt ex-works Ruhr minimum and were heard to be offering at Eur1,050/mt ex-works Ruhr.

Lead times were heard for September-October for HRC and as late as November-December for HDG.

“The third quarter will be the worst quarter, less material will come in and now end-users have recognized that there isn’t enough material and prices will not go down,” the mill source said. “If you don’t get material from local suppliers, you go to imports. People buying higher than domestic, but its a question availability.”

In the Italian market an Italy-based trader said buyers were having problems paying for steel, with credit limits not matching the rising prices in the market.

“Customers now having to pay cash in advance,” the trader said.

— Amanda Flint