European HRC producers mull price rises; buyers skeptical

European prices for steel hot-rolled coil were fairly stable on Friday February 10, but market participants told Fastmarkets they expect another round of increases from mills in the near future.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €760.63 ($817.31) per tonne on Friday, down by just €0.37 per tonne from €761.00 per tonne on Thursday.

The latest calculation of the index was, however, up by €6.25 per tonne week on week, and up by €54.17 per tonne month on month from €706.25 on January 10.

Estimates of tradeable values from the buyers’ side for Friday’s calculation were reported between €750 per tonne and €780 per tonne ex-works.

Offers from integrated mills, meanwhile, were reported closer to €770-780 per tonne ex-works for April-May delivery HRC.

A re-roller in the region reported sales of HRC at €740-750 per tonne ex-works for April delivery.

Meanwhile, market sources said that a leading European steelmaker is planning another round of price rises for second-quarter-rolling coil, despite limited activity in the market.

Buyers were cautious about a new round of increases, given that demand from consuming industries has remained subdued, while some steelmakers have been gradually restarting idled capacities, threatening the uptrend.

Notably, in the week to February 6, ArcelorMittal restarted its blast-furnace (BF) A in Gijon, Spain.

In a fourth-quarter 2022 results conference call on February 9, the company confirmed that its Dunkerque site in France is now operating two BFs, compared with one in the fourth quarter. Only BF2, with capacity for 1.4 million tonnes per year of pig iron, is still idle, the company said in the call.

“BF3 was stopped in September for relining, which lasted 6-7 weeks, so it has been operational since late last year,” a spokeswoman told Fastmarkets.

During January, SSAB, ArcelorMittal Dabrowa Górnicza and US Steel Kosice also restarted BFs.

“January prices rises [for HRC] have been achieved thanks to restocking activity and limited supply. Currently, steel service centers cannot increase prices for end users, so I really doubt whether a new round of price rises from mills would be successful,” a buyer in the region said.

Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Italy, was €759.17 per tonne on Friday, up by €2.50 per tonne from €756.67 per tonne on Thursday.

The latest calculation of the index was up by €7.92 per tonne week on week, and up by €67.50 per tonne month on month from €691.67 on January 10.

In general, trading was poor in Italy in the latest pricing session, with mainly back-to-back business reported. This was also because buyers had purchased enough material during January and were now holding back from trading and watching the market instead.

One integrated mill in the region was offering HRC at €790 per tonne CPT, equivalent to about €770 per tonne ex-works.

Another producer was using a “case by case” approach, with sales reported at €750-770 per tonne ex-works during the week.

Local mills could offer April-delivery HRC.

Import HRC offers to Europe remained quite high and were limited.

Buyers reported price indications for Indian and Asian HRC at €730-740 per tonne CFR for April shipment, with sales reported at €740 per tonne CFR Antwerp from India in early February.

Turkish mills were out of the market after the powerful earthquakes earlier this week.

Market sources said they expect Japanese suppliers to come back with offers for April-shipment coil next week.

One market source gave an indication of Japanese HRC at €750-765 per tonne CFR, but this was unlikely to be considered workable by European buyers, sources said.

Published by: Julia Bolotova