European steel coils surge on returning demand

The European hot-rolled steel coils market surged higher Sept. 7, as returning demand and a lack of import alternatives drove prices higher, sources told S&P Global Platts.

The Platts TSI hot-rolled coil index was calculated Sept. 7 at Eur468.50/mt ($553.81/mt) ex-works Ruhr, climbing Eur12.50/mt on the day.

Cold-rolled coil gained Eur5/mt from Sept. 4 and was assessed at Eur530.50/mt ex-works Ruhr.

In Southern Europe, HRC gained Eur11/mt on the day and was assessed at Eur460.50/mt ex-works South Europe, the highest since March 23.

A German service center source said domestic mills would continue to benefit from the absence of import offers.

“Prices are much higher if you want to secure volumes now, imports are higher and nobody wants to buy them due to the quota and Anti-Dumping duty risk — the price differential is not enough,” he said.

The source said HRC from imports was available at Eur480-485/mt CIF Antwerp and this was Eur100/mt higher from the market low seen in the second quarter.

After cutting capacities at the start of Coronavirus lockdowns some mills would now be looking to bring furnace output back to meet increased demand the source said, adding, “this will be a risk to the market going forward, in case they bring it back too quickly and it could derail the recovery in prices.”

A second German service center source said he was not fully convinced recent price increased would be sustainable.

“The mills always have the same style of behavior, I am not optimistic and will not be buying much as we will have to see if the real demand is there in the market – they are already talking about the next price increase which is too soon,” he said, adding that the market would require time to consolidate recent gains before moving higher.

“The mills will bring back massive capacities and can do this quickly however there remains unresolved issues in the automotive sector and increased political risk for no-deal BREXIT and the US elections also,” he said.

An Iberian-based stockholder said the market would soon be testing Eur500/mt in HRC.

“Imports are very limited and higher prices and I expect prices will move up further, I expect sales to improve as buyers did not book in June and July and are now desperate so they have to pay more.”

— Len Griffin