Northern Europe
Offers for May-delivery HRC from major steelmakers in Northern Europe were reported at €640-660 ($694-715) per tonne ex-works, but sources were not ruling out the possibility of a fresh round of price rises shortly.
Sources reported mainly hand-to-mouth activity in the spot market, with buyers digesting safeguards updates and postponing big purchases.
In the Benelux area, transactions for small tonnages of HRC were reported at €650 per tonne ex-works.
In Germany, buyers estimated achievable prices at €630-640 per tonne ex-works.
Italy-origin HRC was offered to Germany at €650-660 per tonne delivered.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €635.83 per tonne on Tuesday, up by €3.95 per tonne from €631.88 per tonne on Monday
The Northern European index was up by €6.79 per tonne week on week and by €34.43 per tonne month on month.
Italy
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €620.00 per tonne on Tuesday, unchanged day on day.
The index was up by €1.67 per tonne week on week and by €26.25 per tonne month on month.
Offers for May-delivery HRC from two Italian suppliers were reported at €620-640 per tonne delivered (€610-630 per tonne ex-works).
But sources said that target prices for June was around €660-680 per tonne base delivered (€650-670 per tonne ex-works).
Buyers’ estimations of tradeable values were reported at €610-620 per tonne ex-works on Tuesday.
Trading was also quiet in Italy since buyers remained cautious with bookings because they were waiting to have more clarity on safeguard measures.
“Real demand is still weak. Price rises is supported only by safeguards review,” a buyer in Italy said.
Safeguard reaction
The market was digesting news about safeguards adjustments, made available on Tuesday, and it looks like the changed proposed by the European Commission fell short of everyone’s expectations.
Among other things, the Commission suggested a reduction to the HRC cap per country over the tariff rate quota (TRQ) volume initially available in each quarter from 15% to13%.
On top of that, quarterly HRC allocations will be reduced as a result of removing “sanctioned” Russian HRC tonnages from quotas.
In general, the market had mixed reactions to the proposed safeguard measure adjustments.
Mill sources said the proposed measures fell short of expectations and they were “disappointed.” Buyers, in their place, lambasted the quota reductions and cap introduction for a number of steel products.
“[A] cap [was] introduced for nearly all products – plate, CRC, rebar – you name it, all are there. Looks like they want to stop us from importing steel altogether,” a trading source said.
“Looks like the current measures are balanced this time; nobody’s happy, neither mills nor buyers,” a second buyer said.
“HRC quotas are cut by no more than 11% in total, against expectations of 15-50%. It’s a joke. No more than 1 million tonnes of [HRC] imports will be gone [from the EU market] as a result [of new safeguards],” a mill source said.
Nonetheless, the stricter safeguards, along with higher domestic supply, were expected to support domestic HRC prices rebound, sources said.
Tighter domestic supply
On Monday, ArcelorMittal announced a major maintenance program in France, which would entail 90 days stoppage of a blast furnace in Dunkirk.
The maintenance will take place during April-June. At the same time, as of April, reviewed safeguards were expected to come into force, limiting import coil supply.
Industry sources suggested these two factors would likely support a further HRC price rise in Europe.
“Real demand is not there, but tighter supply [of HRC] might boost apparent consumption,” a buyer source said.
On top of that, German steelmaker Salzgitter has declared force majeure on flat steel deliveries, following a fire at its hot strip mill in end-February.
Several sources familiar with the matter said that operations at Salzgitter’s hot-strip mill had been resumed on March 7, and estimated output losses as a result of the fire to be around 80,000 tonnes of HRC.
The company had not responded to requests for comment about the loss of production and an equipment restart date by the time of publication.
