European HRC prices edge higher, mills eye further increases for 2023

Hot-rolled coil prices edged higher in Northern Europe on increased offers, with mills also expecting to seal deals at higher prices early next year because of short supplies and the potential for a pick-up in demand, sources told Fastmarkets on Friday December 23.
European steel makers have gradually pushed their HRC offer prices for January above €700 per tonne EXW, up from €650-680 per tonne EXW in December several sources added.

One integrated mill in Germany was testing the market with an offer price of €740 per tonne EXW.

And even though the higher levels have not yet been sealed in deals, steel mills said they were optimistic because they have good order books, while production cuts and the potential pick-up in end-user demand were also supportive.

During the third and the fourth quarter of 2022, a number of European producers have either stopped steelmaking or trimmed output to balance supply and demand.

An integrated mill in the Benelux area claimed to be nearly sold out for first quarter 2023 rolling HRC volumes.

Transaction levels and buyer estimates of achievable prices in Northern Europe in the week to December 23 were reported at €650-670 per tonne EXW, with some sources indicating that even €680 per tonne EXW was an achievable level.

As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €668.75 ($709.93) per tonne on Friday, up by €11.50 from €657.25 per tonne on Thursday.

The latest calculation of the index is up by €23.96 per tonne week on week and up by €47.14 per tonne month on month.

Mills and automotive industry end users have been making progress with long-term contract negotiations at higher prices than initially targeted, sources said.

“In early November [long-term contracts] prices were discussed [at around] €700-750 per tonne EXW, now we are talking €800-850 per tonne EXW,” the trading source said.

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy meanwhile, was €652.50 per tonne on Friday, unchanged from Thursday.

The latest calculation of the Italian index is up by €14.17 per tonne week on week and up by €64.77 per tonne month on month.

Italy’s mills were largely out of the market and are not expected to come back until January 9, but mill indications for the new year were reported at around €670-680 per tonne EXW.

Overseas suppliers were mostly not offering coil to Europe in the pre-holiday lull, but import offers for coil from Southeast Asia were heard at €630-640 per tonne CFR Italy – although, so far, the price has been considered too high by local buyers.

India-origin coil was reportedly offered at €620 per tonne CFR Italy earlier this week.

Sources said that overseas suppliers from Southeast Asia were cautious about the possibility that the EU authorities might start an anti-dumping investigation, particularly into imported HRC and in November and early December they were very aggressive, offering material at €570-600 per tonne CFR.

Published by: Julia Bolotova