European HRC prices reach highs not seen since 2008 financial crisis

European hot-rolled steel coil prices were heard to be at their highest levels since the peak of the financial crisis in June 2008, when prices rallied to Eur800/mt ex-works Ruhr.

As the steel market grapples with unprecedented steel shortages, long lead times from mills, and tightening imports, prices exceeding Eur800/mt have been highly anticipated, sources told S&P Global Platts.

Customers have become more agreeable to accepting higher prices with few buying outlets available for material, with those caught between mill and buyer finding deals exceptionally hard to finalize because of limited credit options.

“I see real difficulty for customers, service centers, and distributors to finance deals,” a German distributor said, adding “you need a higher credit limit, and that’s the problem for many participants in the supply chain. Our insurance companies don’t give enough credit limit[s] for our use. We agree [to] the price and material, but we cannot do the contracts with end-users.”

Mills were also heard to still be holding back offers because of increasingly large backlogs and extended lead times, with second-quarter delivery times now extending into early Q4.

“Mills don’t take new orders — they are so delayed with their order book that they’re simply not able to offer,” the same German distributor said.

Meanwhile, in the Italian market, prices were also encroaching on Eur800/mt territory, with tradable values heard at Eur810/mt EXW Italy.

An Italian service center said he expected prices to move “little by little” to the new asking prices ArcelorMittal announced last week at Eur850/mt EXW.

— Amanda Flint