In Northern Europe, January-delivery coil was largely sold out, and all producers are seeking higher prices for February deliveries.
Some mills even claimed to be sold out for February and have started to offer material for March, sources said.
“Lead times are getting longer,” a buyer in the Benelux area told Fastmarkets, adding that a producer in Europe had already mentioned March.
“So the trend is for higher prices,” the buyer said. “But what will [happen when] ArcelorMittal restarts capacity in Germany and Salzgitter restarts a furnace?”
Import prices have also been rising and the gap between domestic and import prices is too narrow, he said.
Integrated producers in Germany were reported to be offering at €700-720 ($757-779) per tonne ex-works, with lead times reported at a minimum of eight weeks.
One mill was reported to be offering coil slightly lower, at €690-695 per tonne ex-works.
An offer of January-rolling HRC from a re-roller in the region was heard at €685 per tonne ex-works, compared with €650 per tonne ex-works for December-rolling coil.
Buyer estimates of achievable prices were heard at €670-690 per tonne ex-works, with transactions recently heard at €680-690 per tonne ex-works – although only for limited volumes.
“Everyone is buying only what’s strictly necessary. People are not sure if the current prices can be sustained next year,” the Benelux buyer told Fastmarkets.
A source at a steel service center in the region said: “Higher prices in Europe are not demand-driven, but the consequences of higher import prices, higher raw materials costs and pressure from mills – in combination with continuing negotiations on automotive [supply] contracts.”
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €682.13 ($737.86) per tonne on December 6, up by €4.63 per tonne from €677.50 per tonne the previous day.
Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy, at €665.00 per tonne on December 6, stable day on day.
But Italian index was up by €5.50 per tonne week on week and by €37.50 per tonne month on month.
Restocking activity has slowed down in Italy recently and the higher offer prices have not yet been sealed in deals, sources said.
Notably, February-delivery HRC was on offer in the country at €700-720 per tonne delivered (around €685-705 per tonne ex-works).
This was in sharp contrast with the most recent transaction, which was heard at €680 per tonne delivered (€665 per tonne ex-works) for January-delivery HRC.
Italian mills have good order books, so are keen to maintain high offers.
And reduced supplies, caused by output cuts and uncompetitive imports, were supporting the bullish trend – although real demand was quite slow.
In the secondary market, prices for hot-rolled sheet continued to be reported at a minimum of €750 per tonne CPT, unchanged week on week. But sales in the secondary market were reported to be slow, because buyers have already secured January volumes and were in no rush to buy for February.
Imported HRC offers, meanwhile, were increasing as well, with the cheapest options no longer available.
Notably, Asia-origin coil for February shipment was on offer to Italy at €630-650 per tonne CFR, sources told Fastmarkets.
January-shipment HRC from Turkey was reported to be available to Italy at €660-680 per tonne CFR, including anti-dumping duty.
“[HRC] import prices are rising and the gap between domestic and import prices is too narrow,” a buyer source said. “Therefore, imports are not attractive, and lead times are too long.”
Published by: Julia Bolotova
