Sentiment has worsened in the UK hot-rolled coil market over the past week, with European mills still hungry for tonnes and buyers either well covered or refusing to purchase.
But pricing has moved up a touch, on the continued depreciation of sterling. Argus' weekly UK HRC assessment rose by £5/t to £445/t ddp.
The continued depreciation of the currency is squeezing the ability of European mills to sell into the UK, but they have to be competitive. A leading mill has offered cold-rolled coil as low as £515/t ddp West Midlands, £20/t below its post-increase offer.
A trader has offered CRC in the low £500s/t ddp, but it is unclear whether the supplying mill would deal at this level, primarily as it wants to see what happens with the European safeguard. Third-country hot-rolled remains uncompetitive with EU supply, especially considering lead time.
One trader indicated Turkish in the £490s/t ddp range, and was offering its dwindling dock-stock at £485/t dp from South Wales. Most of the material it had left originated from a UK re-roller. One northern European supplier selling monthly confirmed its September price would be unchanged from August. A domestic supplier offered speed-stock sizes at £450/t ddp, which was refused by one buyer.
Some southern European mills still have July production available, and most are able to fulfil end-August delivery. With lead times so short and prices low, buyers are not currently thinking about fourth quarter requirements as they can get material whenever they need — despite the production cuts that have and will be implemented, nobody is concerned about a shortage.
The outsell market remains downward, as the slower summer season approaches. A mill-owned distributor was leading the charge lower, according to sources, with cut sheet offered as low as £470-475/t ddp.
Outages at a mill in the Benelux countries could tighten up supply into the UK after summer, particularly on wider material, according to one source.
