EUROPE HRC: Northern European prices recover despite lower import offers

EU domestic prices for hot-rolled coil have increased day on day despite lower import offer prices on similar material, sources told Fastmarkets on Thursday February 13.

Fastmarkets’ daily steel hot-rolled coil index, domestic, ex-works Northern Europe, was €479.31 ($522.45) per tonne on Thursday February 13, up by €3.10 per tonne day on day from €476.21 per tonne on February 12.

The index was calculated based on deals heard at €475-485 per tonne ex-works and bids heard at €460-465 per tonne ex-works.

Official offers have been heard at €480-500 per tonne ex-works.

Northern European mills have been offering April-May shipment coil. The lower availability of the material that resulted from production cuts across Europe, and seasonal restocking by distributors, was supporting domestic HRC prices, according to market sources.

But with lead times becoming longer, buyers have become less keen to risk making new deals for substantial volumes of material. As a result, buying activity has been limited because buyers were uncertain that a domestic price rise would be sustainable.

Domestic prices in January-February this year have also been supported by a lack of competitive import offers.

Import prices for HRC in Northern Europe have moved down, however, by about €10 per tonne to €460-470 per tonne cfr Antwerp.

Currently, the gap between domestic and import prices is not wide enough to pose a threat to European steelmakers. But buyers hope to achieve import prices of around €450-455 per tonne ex-works, which would create competition between domestic and overseas suppliers.

In the meantime, Italian mills have been reported to be trading HRC at €440-445 per tonne ex-works, down by €5-10 per tonne compared with prices last week. Steelmakers still claimed to be targeting €460-470 per tonne ex-works.

The decrease in Italy was driven mainly by poor demand from both distributors and end-users. Consumers have also been reluctant to accept any price rises, according to market sources.

In addition, one Turkish mill has been offering material to Italy at €450-460 per tonne cfr, down by about €10-15 per tonne week on week.

About 20,000 tonnes of HRC from Turkey was sold to an Italian buyer at $475 per tonne fob, the equivalent of €455-460 per tonne cfr, taking into account a freight rate of $20-25 per tonne, according to market sources.

And HRC from Taiwan has been offered to Southern Europe at €460 per tonne cfr.