Local sheet could command a premium in EU as virus impacts logistics

A northern European mill source said he was now seeing an increase in orders as buyers looked to replace existing bookings in southern Europe.

“Buyers are now asking us to rush through orders that they consider are at risk elsewhere due to the virus, they are worried that they won’t get delivered,” the source said, adding that tradable value was now at Eur500/mt ex-works Ruhr.

“We have heard import offers in the market at the lower end but doubt these will get accepted due to the logistical risks that now exist,” he said. HRC was heard offered CIF Antwerp at Eur460-465/mt.

“Due to the virus some end users will now potentially look to pare back manufacturing and imports do not offer flexibility if that is needed.”

A Benelux-based service center manager said the market was tighter with lead times extending to early May delivery.

“Mills are now firmly in charge with lead times that are longer, however with the summer months approaching it will be interesting to see if they can maintain these price levels,” the source said.

A European mill source said the market was firm in northern Europe and that regional pricing could emerge if there are logistical difficulties in Europe due to the COVID-19 outbreak.

“In the coming weeks we may see people looking to buy local from local regional mills and this may incur a premium depending on market conditions and supply availability,” he said.

“It is important however that European mills work to allow European manufacturing to continue during this crisis.”

One Italy-based service center source said tradable value was at Eur450 ex-works Italy and that import offers were heard as low as Eur440/mt CIF Italy ports from India and Asian mills. HRC from Turkish origin was offered at Eur450/mt CIF Italy Ports.

“The market is slowing down a lot in Italy but we are working as normal” the source said.

“There is of course the possibility that buyers are now placing orders with northern European mills due to the Italian market uncertainty and overall demand remains low still.”

An Italy-based trader said value was at Eur456/mt with material from imports available at Eur450/mt CIF Italy ports.

“We have seen an increase in demand in the last days as customers are trying to secure metal due to concerns on logistics impacting deliveries within Italy,” the source said. “Availability of road freight is declining.”

“China is now returning to work and with that I expect import offers from Asia to withdraw in the coming days,” he said.

The S&P Global Platts TSI hot-rolled coil index was calculated unchanged Wednesday at Eur482.50/mt ($544.02/mt) ex-works Ruhr, and in southern Europe was assessed at Eur453/mt ex-works Italy, down Eur3 day on day.

Cold-rolled coil slipped 50 euro cent lower day on day and was assessed at Eur556/mt ex-works Ruhr.

— Len Griffin