Italian HRC seen increasing further

Italian coil prices are seen increasing again as European producers are mulling a second step of hikes, Kallanish learns from market participants.

Over the past weeks, strong demand has returned to the market, as have good sales volumes for both coil and its derivatives. Italian hot rolled coil has gradually increased in contracts, reaching €650/tonne ($708) base ex-works, with producers asking for €670-680/t delivered and quickly filling January order books.

With limited import alternatives available, service centres and re-rollers are purchasing mostly in Europe. All EU safeguard quotas for Asian countries will be exhausted a few days after renewal on 1 January and the same situation is expected after 1 April.

For the first quarter, European re-rollers have been purchasing volumes in some Asian countries, which will cause available quotas for these origins to shrink. In January, buyers will find themselves obliged to pay duty for the material imported above quota levels.

Vietnamese, Korean and Japanese exporters are giving limited allocations to European buyers, prioritising domestic and neighbouring markets. Turkish material is always considered too expensive, and India will not be able to cover the needs of all of Europe. Offers of HRC from Asia are currently at €630-650/t cfr Europe.

European steelmakers, being the only sources of procurement for buyers, will increase prices to €700/t delivered in the coming days. At least another round of hikes is expected in the market in Q1, considering the low availability.

Despite this month seeing strong demand and increasing prices, the market remains fragile. Service centres’ clients report persistent weakness in consumption.

Natalia Capra France