Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe, was €431.63 ($479.15) per tonne on December 5.
The assessment is based on “workable” prices reported by market sources at €425-430 per tonne ex-works and the lower end of official offers of €435-440 per tonne ex-works.
No new deals have been reported, and buyers are expected to start negotiations with steelmakers for a new round of deals next week, according to market sources.
The steelmakers in the region have been offering first quarter rolling HRC at €435-450 per tonne ex-works, and they are expected to achieve a transaction price rise of about €5-10 per tonne.
The domestic price recovery is expected to be supported by production cuts across Europe and a lack of competitive import offers.
In addition, demand has improved due to the fact that distributors have returned to the market looking for new orders after limiting their purchases in the third and fourth quarter, when prices had been declining. The positive impact from this factor might be limited, however, as some buyers have already secured some volumes in the past couple of weeks, according to market sources.
In the meantime, the situation in the South of Europe has been similar to that in the North, although the effects from reduced domestic output have been stronger than in the North, market sources said.
Italian steelmaker ArcelorMittal Italia, formerly known as Ilva, has been in negotiations with authorities to review a new industrial plan - adding uncertainty to the market regarding the mill's output, according to trading sources.
In November this year, ArcelorMittal announced its intention to idle equipment at the plant, after it decided to exit the purchase deal for the asset. That decision was made after Italian authorities removed the legal protections necessary for ArcelorMittal to implement its environmental plan without the risk of criminal liability.
The combination of uncertain future output from ArcelorMittal Italia, reduced output from Italy’s Arvedi due to maintenance and higher slab costs affecting re-rollers resulted in an increase of offers in the market.
Fastmarkets’ price assessment for steel slab, export, fob Black Sea, CIS was $380-385 per tonne on Monday December 2, up by $10 per tonne week on week.
Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, exw Southern Europe narrowed upward to €415-420 ($460-465) per tonne on December 4, compared with €410-420 per tonne a week earlier. The assessment was based on the deals heard in the market.
Italian mills have been targeting prices of up to €430 per tonne ex-works, and they are likely to achieve the higher prices, supported by a lack of competitive import offers.
Northern European steelmakers are expected to achieve increased domestic transaction prices in December, partially reflecting higher offers, sources told Fastmarkets on Thursday December 5.