EUROPE HRC WRAP: Domestic prices rise further on continuous shortage

Transaction prices for domestic steel hot-rolled coil increased further across Europe in the week to Friday December 18, due to limited supply from both domestic and overseas suppliers.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €650 ($796.90) per tonne on Friday December 18, up by €43.75 per tonne week on week and by €112.08 per tonne month on month.

The assessment was based on market participants estimations of achievable prices at €640-660 per tonne ex-works.

Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, exw Southern Europe was €600-640 ($731.88-780.67) per tonne on Wednesday December 16, up by €20-50 per tonne from €580-590 per tonne on December 9.

In Southern Europe, Italian producers have been targeting prices of €640-650 per tonne ex-works, but buyers estimated “workable” prices at €600-630 per tonne ex-works. By the end of this past week, however, the buyers estimated achievable prices as €650-670 per tonne ex-works.

On Thursday December 17, ArcelorMittal increased its offers for second-quarter rolling HRC across Europe to €700 per tonne ex-works, and market sources expect other steelmakers to do the same. One Northern European producer already offered HRC at €680 per tonne ex-works last week and said it was planning to push offers up by €20 per tonne soon.

Producers across Europe are sold out until April-May 2021 shipment coil, and the volumes available for the second quarter are limited, sources said. This, combined with a low volume of import offers and high prices for overseas coil, has created a shortage of coil products in the market.

The effects of various national lockdowns during spring and summer of this year triggered a shortage of domestic products, market sources said. Domestic production has been limited since blast furnaces were stopped during Covid-19 pandemic-related lockdowns, and although producers announced that the majority of furnaces have been restarted, some buyers doubt that all the equipment has been relaunched due to the high cost of restarting and high raw material prices.

Other market participants noted that production rates remained low.

Buyers believe that the recent rapid price growth is not sustainable, however, and that prices will collapse as soon as producers bring their full capacities back to the market.

Some sources said that production rates at the majority of the mills have slowly been increasing and that this will have an impact on both the market and prices in the second quarter.

In the meantime, import prices have been high, but Italian buyers who traditionally rely on imported material have accepted those prices in some cases.

A supplier from India has sold substantial volumes of HRC to Italy at €640 per tonne cfr. Another producer from India has been offering HRC at €680 per tonne cfr.

Offers of the material from Turkey have been heard at $770-780 per tonne cfr. But buyers have shown no interest in the material because the European Commission is scheduled to set preliminary anti-dumping duties on shipments from that country in mid-January, making imports from Turkey too expensive and too risky.

The European Commission has calculated preliminary anti-dumping duties for Turkish hot-rolled coil at 4.80-7.60%, it said in a letter sent to interested parties, market sources told Fastmarkets on December 17.

Provisional measures in the case, if any, will be imposed by January 14 next year, and the calculated duties can be changed at any time up to this deadline. Definitive duties are scheduled to be set by July 13, 2021.

Fastmarkets’ weekly price assessment for steel hot-rolled coil, import, cfr main port Southern Europe jumped to €640-645 ($780.67-786.77) per tonne on December 16 from €580-600 per tonne a week earlier.

And Fastmarkets’ weekly price assessment for steel hot-rolled coil, import, cfr main port Northern Europe increased to €630-640 ($768.47-780.67) per tonne on December 16 from €600-605 per tonne a week earlier.