HRC prices stable as service center weighs alternatives to risky imports

European hot-rolled coil prices were in stalemate for the fourth day in a row Oct. 13 amid a lack of activity in the market from producers and buyers, with no recent deals heard. Prices were heard steady in the vicinity of Eur1,040-1,050/mt ex-works Ruhr as mills worked to finalize yearly automotive contracts, sources told S&P Global Platts.

An Italian service center source said the southern market was still in a “volatile” phase, though he could see some market signals that the decreases would cease as end-user demand returned and availability rose.

The source said he expected prices to therefore stabilize with only minor corrections, and that imports would have little effect on prices.

“I think the perception of EU mills on imports is higher than it actually is,” the service center source said. “Imports are aggressive, Turkey is moving up and down, but buying from imports from some specific countries like Turkey, India and Russia — we are very reluctant to buy due to severe duties, and keeping material at ports is very risky.”

More desirable volumes for imports free of debilitating duties were said to be from Japan, Mexico and Egypt, where risks were minimal.

After several announcements in the last few weeks from European mills about new carbon surcharges, there was market talk of market-leading mill Arcelor Mittal also implementing a gas surcharge because of higher energy costs, though this could not be immediately confirmed.

Tata Steel Europe was the first to announce a carbon surcharge, followed by Voestalpine, Thyssenkrupp, Arcelor Mittal and British Steel, to name a few. The new pricing element comes as mills have decided that the cost of emitting carbon during the production process should be passed on to the consumer.

Platts assessed North European HRC prices stable at Eur1,040/mt ex-works Ruhr, and in Southern Europe, prices were also steady at Eur937/mt ex-works Italy Oct. 13.

— Amanda Flint