EUROPE HRC WRAP: Domestic prices up again on shortage, strong demand
Transaction prices for domestic steel hot-rolled coil continued to rise across Europe in the week to Friday December 11, due to tight supply from both domestic and overseas suppliers and solid demand.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €606.25 ($734.19) per tonne on Friday, up by €31.25 per tonne week on week and by €81.75 per tonne month on month.
Friday’s index was based on “workable” prices and deals heard at €590-610 per tonne ex-works and offers heard at €610-620 per tonne ex-works.
A week earlier, ArcelorMittal announced that it had increased the offer price for its second-quarter-rolling HRC to €650 per tonne ex-works in both Northern and Southern Europe. Some other Northern European producers have pushed official offers up to €650 per tonne ex-works last week.
These offers were not included in the index calculation because no deals were confirmed at those prices, and buyers said they were an indication that mills were simply seeking higher prices rather than reflecting the actual market level.
Fastmarkets’ weekly price assessment for steel HRC, domestic, exw Southern Europe, was €580-590 per tonne on December 9, up by €30 per tonne week on week from €550-560 per tonne.
The assessment was based on deals, “workable” prices and offers heard in the market.
The jump in the domestic price was driven by a shortage of material combined with solid demand from distributors, market sources said.
Northern European mills have been offering April-May production HRC, and volumes available for the second quarter of 2021 will be limited, sources said. Italian producers, meanwhile, have been offering March-April rolling coil.
But buyers claimed that the rising price has not been their main concern, because they were struggling to get volumes.
Demand has been strong both from end consumers (including the automotive sector) and distributors which have low stocks.
The number of overseas offers has been limited, and both prices and lead times have been comparable to those for domestic material, resulting in low interest in imported coil. In addition, access to traditional suppliers has been limited due to import quotas for Turkey and India being well filled.
Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe, jumped to €580-600 per tonne on Wednesday last week, compared with €560-570 per tonne a week earlier.
The assessment reflected deals and offers heard in the market for material from Turkey, India and Egypt.
And Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Northern Europe, jumped to €600-605 per tonne on December 9, compared with €570-580 per tonne a week earlier.
By the end of last week, offers of Russian HRC were being heard at €630 per tonne fca Antwerp.
Market participants did not expect the shortage of material to end any time soon, instead expecting it to continue through the first three months of 2021, with demand remaining strong due to low stocks.