A large north European steelmaker is contemplating increasing its recently tabled hot-rolled coil offer of €600/t to €620/t.
The mill cited strong sales via its online platform, a reduction in import penetration and some increase in apparent demand as the main reasons for the potential move.
There has been no strengthening in real demand, but supply tightness from 1 April — led by the ongoing safeguard review and the anti-dumping case on Egypt, Japan, India and Vietnam — will support prices, one executive at the company said.
"Even though the distribution market is not there yet, we're gaining traction [with increases] and they need to get on board. From a real demand perspective, there is no step up, but the price strength should come from the supply equation, and we do expect looking at imports there will be more tightness there", the executive added.
In their discussions with the European Commission, mills have asked for an overall quota reset as demand has fallen 20pc since the safeguard started, and duty-free volumes have been liberalised by around 15pc. They have also requested an end to pro-rata duties on the first day of a quota resetting, and for a higher duty above 25pc. Producers have also requested the 15pc other countries cap, currently applied to hot-rolled coil and wire rod, be rolled out on downstream coil products.
The market has moved up by €18.75/t since returning from the Christmas holiday, according to Argus' benchmark northwest EU HRC index, which has increased from €558.25/t to €577/t since 2 January.
Some traders have been gearing up for an increase in prices on the back of curtailed import supply, but service centres are still grappling with low end-demand and competition for sheet sales.
Egypt, Japan, India and Vietnam have represented 40-58pc of the EU import market at the reopening of quarterly quotas recently, so any dumping duties could have a meaningful impact on their volumes.
The safeguard review could also see overall duty-free imports drop by around 20pc, according to some market participants. Some suggest HRC imports could fall from 8mn t and above to around 5mn t, on the back of the review and the dumping investigation.
