European hot-rolled coil prices moved up further in recent transactions; limited imports and surging energy costs fueled upbeat sentiment, Fastmarkets heard on Thursday March 5.
In Northern Europe, offers for May delivery HRC were heard at €700-720 ($812-835) per tonne ex-works.
Transactions for limited tonnages of HRC in Germany and the Benelux region were heard at €700 per tone ex-works on Thursday for May delivery.
“We are getting first orders at €700 [per tone ex-works] for HRC, more inquiries are coming,” a steelmaker source told Fastmarkets.
“Order books are strong at European suppliers, and import options are getting increasingly scarce and difficult,” a buyer in Germany said.
As a result, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €700.63 per tonne on March 5, up by €5.06 per tonne from €695.57 on Wednesday March 4.
The index was up by €14.90 per tonne week on week and by €49.38 per tonne month on month.
Italy-origin coil was offered to Germany at €720-730 per tonne base delivered, the same as seven days prior. But several sources told Fastmarkets that an Italian supplier was likely to step back from the market to revise offers upward, considering surging energy costs.
“For electric-arc furnace (EAF) based steelmakers, this surge of energy prices is very sensitive cost-wise,” a second buyer in Germany told Fastmarkets.
Natural gas prices in Europe were hovering above €50 per megawatt hour on Thursday, compared with around €30-34 per MWh during the month of February.
Gas prices started spiking in Europe during the week commencing Monday March 2, following the new military crisis in the middle East, Fastmarkets reported.
It is worth noting, however, that the vast majority of flat steel products in Europe were produced via the conventional blast furnace-basic oxygen furnace (BF-BOF) route and were therefore far less exposed to energy cost shocks than EAF-based steelmakers.
Blast furnace gas — a by-product of ironmaking — together with coke oven and converter gases, is typically captured and burned to generate electricity, supplying a significant share of a steel plant’s energy needs and reducing reliance on external power.
Meanwhile in the secondary market, 4 mm HR sheet was heard changing hands at €750 per tonne CPT in Germany, compared with €730-740 per tonne CPT in the previous week. New offers, however, were heard at prices closer to €800 per tonne CPT, to reflect the higher feedstock costs.
“Stockists that had previously indicated they were sufficiently covered have returned to the market and are accepting some price increases,” a source in Italy said.
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €680 per tonne ex-works on March 5, up by €3.75 per tonne from €676.25 per tonne on March 4.
The index was also up by €9.37 per tonne week on week and by €32.50 per tonne month on month.
Buying activity in the spot market has picked up over the past few days, as customers who had been delaying purchases in anticipation of lower prices moved quickly to secure material at previous levels. As a result, some mills temporarily suspended sales, Fastmarkets heard on March 5.
Producers were maintaining target offers for May delivery HRC around €700 per tonne ex-works earlier this week, although limited tonnages were heard to be booked at €670-680 per tonne ex-works. Market participants expect producers to reassess pricing levels next week.
In terms of imports, fresh offers remained scarce, market sources said, largely due to uncertainty surrounding the EU’s new safeguard regime and country-specific quota allocations. The lack of clarity regarding Carbon Border Adjustment Mechanism (CBAM) costs has also made buyers more cautious.
At the same time, extended lead times have added further complexity to the market. Ongoing geopolitical tensions in the Middle East have forced many vessels shipping from Asia to Europe to reroute around the Cape of Good Hope, extending transit times by roughly two weeks and contributing to tighter prompt availability.
Recent offers from Turkey, which was considered a more or less “safe” supplier with a faster lead time, were heard at €545-565 per tonne CFR to Southern and Northern European ports.
