Stuck between an expensive rock — iron ore — and a hard place — the finished steel market — European steelmakers are becoming more creative and flexible in their pricing mechanisms.
European steel mills offered to transition half-year contracts to quarterly contracts over July-December, in response to the €50/t reductions sought by buyers after a substantial drop in spot prices from the fourth quarter of last year. Argus’ headline northwest Europe hot-rolled coil (HRC) index had fallen to €474.75/t on 15 July from €535/t on 12 November 2018, as a decline in automotive demand rippled through other sectors and led to an intense bout of destocking over the first half of this year.