European HRC prices were heard higher May 7, with the market now executing higher prices after another offer increase from market-leading mill ArcelorMittal May 7, sources told S&P Global Platts.
One German distributor said the increase announced by ArcelorMittal to Eur1,050/mt for HRC was a theoretical price.
“The announcement is not connected with the allocation on quantities,” the source said, also citing a deal at Eur1,030/mt ex-works Ruhr.
A European mill source said: “A lot of industry is doing updates, as they postponed maintenance because of poor cash flow.”
European producer NLMK was heard to have returned from its maintenance period May 7, two sources said.
A second German distributor said sentiment was very bullish, with iron ore prices now higher than $200/mt.
“I’ve heard rumors at Eur1,100/mt, and I expect other people to test this. There is a limited portion of offers. I expect next week the market to try Eur1,100/mt or something close,” the source said.
While imports have been a viable buying outlet for some buyers, the same German source said it was going to be increasingly difficult to obtain foreign material from countries like India because of the severity of the coronavirus pandemic, as well as the pending decision from the European Commission regarding the quota allocation system.
“The quota [system] doesn’t make any sense. Domestic producers aren’t able to supply the market, so we are hurting ourselves,” the distributor said. “Asian region prices went up after [China] removed the export rebate. The Chinese domestic market dropped a bit. We are still well below the US market.”
In the Italian market, an Italy-based mill source said prices were Eur980-1,000/mt ex-works Italy but said the new Eur1,050/mt would be accepted by the market. Meanwhile, an Italy-based service center source cited a tradable value at Eur1,000/mt ex-works Italy.
— Amanda Flint, Laura Varriale
