European HRC prices flat but higher offers expected on tighter supply

The European hot-rolled coil market was quiet on Monday March 27, with participants awaiting higher offer prices and buyers becoming increasingly worried about long lead times and hyped-up prices, sources told Fastmarkets.
European buyers have remained very cautions after the latest price rises earlier this month, and continued to make bookings only for small tonnages to cover their immediate needs.

“Contracts are mainly done back-to-back, as well. The key reasons are that lead times have already stretched to the second half of 2023, and [there is] a lack of clarity over whether the increases are sustainable or not,” one trading source told Fastmarkets.

“Customers still think very [hard] before they decide to buy [HRC],” a second source said.

Reduced supply continued to be the major driver for the market, most sources agreed.

“The [HRC] price rise is more driven by the shortage from Tata Steel [in the Netherlands], and the situation with Gijon is not 100% clear,” the second source said. ArcelorMittal had to halt operations last week at its blast furnace in Gijon, Spain, when a fire broke out.

“Tata IJmuiden will take out one blast furnace this week until September,” a third trading source told Fastmarkets.

Offers from integrated mills in Northern Europe were reported at €850-880 ($915-947) per tonne ex-works, while a re-roller was offering HRC at €830 per tonne ex-works.

Most suppliers had lead times reaching to June-July.

Buyers’ estimates of achievable prices remained at €830-850 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €852.29 per tonne on Monday, down by €0.84 per tonne from €853.13 per tonne on Friday.

The latest calculation of the index was up by €7.29 per tonne week on week and by €59.79 per tonne month on month.

The calculation of Fastmarkets’ corresponding daily steel HRC index, domestic, exw Italy, was €831.48 per tonne on Monday, up by €4.97 per tonne from €826.51 per tonne on Friday.

The latest calculation of the index was up by €9.20 per tonne week on week and by €46.48 per tonne month on month.

The Italian index was based on offers from integrated producers in the nation, reported at €870 per tonne delivered (€850 per tonne ex-works) for June-July shipment, offers from re-rollers available at €820-830 per tonne ex-works, and buyers’ estimates of achievable prices also reported at €820-830 per tonne ex-works.

One transaction was heard at €830 per tonne ex-works on Monday, for a limited tonnage.

Despite the long lead times, Italian buyers have become increasingly interested in overseas coil bookings, given the tight domestic supply and the increasing gap to domestic prices.

A South Korean steel mill was offering HRC to Italy at €770 per tonne CFR for June shipment, sources said. And a booking of Japan-origin HRC for June shipment was reported at €780 per tonne CFR late last week.

Published by: Julia Bolotova