European HRC market contends with short supply

European hot-rolled coil prices were heard higher in the market March 10, as buy-side customers and traders grow more discontented with the chronic lack of steel available amid bullish predictions of even higher prices in the next week, sources told S&P Global Platts.

A German distributor was still waiting for steel suppliers to respond with valid offers for Q3, when delivery can be expected no earlier than September-October.

“There is pressure from the buying side. The force majeure issues still have not sorted out what the mills have lost,” the source said. “[A German mill] emphasized how they’re trying to keep customers happy but they’re still contending with delays.”

Sources said the current market dynamic has fostered discussions about prices without an understanding of the tonnage needed to support such arguments.

Buyers were heard to be actively taking from imports, with India having returned to the imports market offering CRC at Eur940 FCA Antwerp

Vietnamese sellers also made a reappearance, offering HRC at Eur725/mt CIF Antwerp, June-rolling with delivery expected in September, the same distributor source said.

In the Italian market, an Italian trader noticed a “new wave of panic” in the last week.

“No import offers, eventual stop of Ilva mill, good demand, probable prolongations of safeguard measures, long delivery times and big delays from several mills,” the trader said. “Service centers are low in stocks and have had to increase prices.”

One European trader insisted the main issue in the current market was the supply shortage. He said HRC at Eur740/mt EXW Italy would be possible, but that it depends on what material the mill is “willing” to provide. “If you buy what they have then, yes, that price is workable. If you ask what you need, then you don’t get anything,” said the trader, suggesting the market has turned heavily one-sided, with mills having the upper hand.

He said buying imports is similarly difficult as agreed prices for orders have been put back on the table by some Asian mills, a headache for back-to-back business.

— Amanda Flint, Laura Varriale