EUROPE HRC WRAP: Buyers likely to accept steelmakers’ raised offers - for now
Some European steel producers pushed their official hot-rolled coil offer prices upward in the week ended Friday January 29, with buyers likely to accept some transaction price increases in the short term.
On January 28, ArcelorMittal increased its official offers for HRC to €750 ($910) per tonne ex-works across the EU, up by €20 per tonne from previous offers. And Swedish steelmaker SSAB has been targeting a €40 per tonne price rise, sources said earlier last week.
In addition, market sources said that Italian re-roller Marcegaglia has increased its HRC offers to €760 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €712.50 ($862.83) per tonne on January 29, up by €1.25 per tonne week on week, and by €47.50 per tonne month on month.
The calculation of Friday’s index was based on achievable prices heard at €700-740 per tonne ex-works and bids heard at €700-720 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel HRC, domestic, exw Southern Europe, was €700-710 per tonne ex-works on January 27, compared with €700-715 per tonne a week earlier.
The assessment was based on achievable prices and the lower end of offers heard at €700-720 per tonne ex-works.
Producers’ bullish tactics have been supported by solid demand and by supply remaining tight, as well as the lack of cheaper imported alternatives for buyers.
Producers in the North of Europe have been reported to be offering either late-second-quarter-rolling HRC or to be completely sold out for second-quarter production. Italian steelmakers, in the meantime, have been offering and trading April-May rolling coil, according to market sources.
Several market sources said that buyers were struggling to get material from domestic mills and that lead times were getting longer.
Buyers were still concerned about possible price decreases later in the first quarter and will therefore try to limit their purchase volumes. But those who need to re-stock will probably have to pay higher prices in the short term.
Some market participants preferred to wait and see what the market trend will be in late February, when Chinese mills return from the Lunar New Year holiday on February 11-17.
Some lower import offers to the European market also weighed on sentiment. Overseas offers, however, were still not competitive with domestic prices, while lead times were similar or longer than those from European mills.
The latest offers of HRC from Russia’s Severstal have been heard at €699 per tonne cfr Antwerp, including anti-dumping duty of €17.60 per tonne.
In Southern Europe, offers of HRC from Japan have been heard at €680-685 per tonne cfr, from India at €680-690 per tonne cfr, from Egypt at €680 per tonne cfr and from Serbia and Russia at €680-700 per tonne cfr.
Two sources said that an Italian re-roller has booked several vessels loaded with HRC from China at $700-705 per tonne cfr.
Market participants believed that this material was to be processed into hot-dipped galvanized coil for re-export to the UK and the United States. In this situation, anti-dumping duties would not be applied to the material because it will be processed and re-exported, and because of this, the price was not included in the assessment.
A dozen EU member states have called on the European Commission to extend the safeguard measures on steel imports that are due to expire on June 30 this year, according to a letter seen by Fastmarkets on January 26.
Last week, SSAB said that it no longer planned to acquire the IJmuiden plant in the Netherlands from Tata Steel.
Liberty Steel Group has completed “due diligence” on Thyssenkrupp Steel Europe and, based on the results, has submitted a “firmed up” bid for its acquisition, the UK-based steel company told Fastmarkets on January 25.