European HRC prices push up on limited supplies

European hot-rolled coil prices increased again on Tuesday January 9, mainly because of good order books at the region’s steel mills but also due to reduced supplies, sources told Fastmarkets.

The European flat steel market has now properly restarted after the year-end holidays, with some mills aiming for ambitious price rises for April delivery HRC, citing good order books.

Notably, the leading European steelmaker ArcelorMittal again increased its offer prices for HRC – this time raising the price for April deliveries by €50 ($55) per tonne, to €800 per tonne ex-works in Northern Europe.

The most recent offer for March-delivery HRC from the producer was heard at €750 per tonne ex-works in late December.

Other integrated mills in Northern Europe are currently offering March delivery HRC at €740-750 per tonne ex-works, Fastmarkets understands.

“Prices [for HRC] are moving up quickly now… But it’s not a demand-driven increase because underlying real demand remains low. The increase is entirely driven by supply concerns,” a source in Northern Europe said.

Buyers in Europe have just returned from the holiday break and are digesting the new offers, with some sources putting the tradable range at between €700 per tonne and €730 per tonne ex-works.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €723.33 per tonne on January 9, up by €17.70 per tonne compared with €705.63 per tonne on Monday.

The index was up by €28.33 per tonne week on week and up by €37.91 per tonne month on month.

Restocking was expected to support HRC price rises in the domestic market, especially given the lack of competitive imports.

“Quotas [for HRC have already been] exceeded for the ‘other countries’ category, which means we are going to [have to] pay a dury of around 8.4% on HRC imported under that category. It’s quite penalizing,” a buyer source said.

On Tuesday, a buyer reported an offer for pickled and oiled HRC from South Korea at around €700 per tonne CFR to Europe, for mid-March shipment. No firm offers were heard for untreated, black coil, but sources estimated potential offers from Asia to be “no lower than €660-670 per tonne CFR” to Europe.

In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €705.00 per tonne on January 9, increasing by €13.75 per tonne from €691.25 per tonne on January 8.

The index was up by €16.67 per tonne week on week and up by €39.58 per tonne month on month.

The Italian market was slowly restarting after the holiday, with a “real market price” likely to become clearer toward the end of the current week, sources said.

In general, they added, prices in Italy are likely to reach €740-750 per tonne delivered in the next few weeks, which is in line with offers in Northern Europe.

On Tuesday, buyer sources estimated the market level at €700-720 per tonne ex-works.

But some market participants were concerned about whether the Italian mills would be willing to accept €700 per tonne ex-works, given the tight supplies.

“[An integrated mill in the south of Italy] has financial problems and is quite unreliable,” a second buyer source told Fastmarkets, “so, basically there are two [reliable HRC] suppliers active in Italy.

“[And] imports are getting increasingly tricky because of the depleted [EU] quotas, rising prices and the Red Sea shipping crisis in the Red Sea,” the source3 added.

Published by: Julia Bolotova