EUROPE HRC WRAP: Shortage drives prices up again; buyers face delivery delays
Domestic prices for steel hot-rolled coil substantially increased across Europe over the week to Friday March 12, driven by a material shortage and strong demand.
In addition, most European steelmakers have been delaying their order deliveries, market sources said.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €793.00 ($947.48) per tonne on March 12, up by €43.00 per tonne week on week and by €73.00 per tonne month on month.
The calculation of Friday’s index was based on transactions heard at €780-800 per tonne ex-works and achievable prices reported at €790-800 per tonne ex-works.
Fastmarkets’ price assessment for steel HRC, domestic, exw Southern Europe, was €730-770 per tonne on March 10, up by €10-40 per tonne week on week from €720-730 per tonne.
By the end of the week, however, Italian steelmakers had managed to achieve a rise in transaction prices, and deals were heard at €770-780 per tonne ex-works on Friday.
Market sources said that the majority of mills across Europe have been delaying orders for various reasons, including technical issues and delivery disruptions caused by severe weather last month in Germany. This was adding further pressure on distributors that have lower stocks of coil.
European producers have been offering limited quantities of late-third-quarter production coil and buyers have had to accept higher prices to secure material for restocking. Distributors were reported to have low stocks of coil products and have been struggling to acquire the necessary volumes, market sources said.
In addition, most European producers have scheduled maintenance during the summer months - with Thyssenkrupp planning to reline one of its blast furnaces in the third quarter, for instance. Volumes produced in July-September are traditionally low.
Last week, ArcelorMittal Italia said that the state court ruled on March 11 that the steelmaker can continue operations. On February 13, ArcelorMittal Italia had been ordered to close the hot area of its Taranto plant within 60 days, but had appealed against that.
But the decision to allow the plant to continue production is not final, according to market sources. The latest ruling grants the plant temporary permission to produce, until the Italian authorities make a final decision in mid-May. Until then, the market sources added, production rates will remain limited.
Buyers were also unable to source the volumes they needed from overseas suppliers due to a combination of high prices and the effects of Europe’s anti-dumping and safeguard measures.
Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Southern Europe, was €705-730 per tonne on March 10, up by €15-30 per tonne week on week.
The assessment was based on offers of material from Russia, Turkey and India.
The corresponding weekly price assessment for steel HRC, import, cfr main port Northern Europe, was €700-725 per tonne on March 10, up by €10-25 per tonne over the week.
The assessment was based on offers and transactions for coil from India, Turkey and the CIS. At the start of the week, producers had raised their official offers as high as €750-770 per tonne ex-works, according to market sources, but no transactions have been heard at these higher prices.