EU HRC: Northwest price jumps on talk of another rise

  • Market: Metals
  • 17/01/20

Northwest European hot-rolled coil (HRC) prices continued to firm today, as a leading steelmaker was informing customers of another potential offer increase to €520/t ex-works base.

Argus' domestic northwest Europe index jumped by €6.25/t today to €449.25/t ex-works, taking the monthly average to €441.50/t. The February and March forwards were assessed at €460/t and €467.50/t, respectively.

An offer for Russian material was heard at €455/t free on truck Antwerp, including duty, by far the most competitive quote for overseas material. Asian cold-rolled coil has been offered at €540/t cfr Antwerp for February-March shipment, but bids are substantially lower at €510/t cfr. A trader recently sold Turkish HRC into Spain at around €470-475/t cfr, S235 base.

Most domestic northwest European mills have hiked offers to the €480-500/t ex-works base range, although some are still withholding quotations to try and ascertain how much they should increase. Most northern mills see bids firming, with stockholders increasingly convinced that the uptrend has substance. One trader recently bought high-grade Asian HRC at $520/t cfr (€467/t) for the European market.

There is still some concern about sheet prices in Germany, however, particularly in the south. While some decoilers are trying to hike sales prices, others seem keen to turn material into cash and as a result are selling below replacement cost. This is likely because they have lower priced coil in stock ordered at the nadir of the market in November, but it is still something of a constraining factor.

One northwest European producer may also still be hungrier for volume than some of its competitors, though it did announce a €50-60/t hike earlier this week.

The Italian market appears to be stabilising, with service centres concerned about paying much more with sheet prices not rising and demand weak. Argus' daily index nudged up by €1.25/t today to €439.75/t ex-works.

Serbian HRC was offered into Italy at €465-470/t delivered, at parity to or slightly above domestic levels.

Opinions varied on market direction. Some traders were offloading their positions given lethargic demand, the downturn in scrap prices into Turkey and a perceived greater eagerness to sell from the country's mills. But others still said that offers were €490/t cfr and above, and expected domestic prices to strengthen given the firm global situation and rising northwest European prices. Slab prices also look set to increase in the next round of buying, which could underpin coil.


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Red Sea tensions could halt EU India HRC quota overfill

Red Sea tensions could halt EU India HRC quota overfill

London, 27 March (Argus) — Elevated shipping times caused by tensions in the Red Sea could prevent India's hot-rolled coil (HRC) safeguard quota in the EU from overfilling on 1 April, as participants had expected. India shipped just over 520,000t of HRC to the EU in December and January, according to customs data, all of which appears to have been cleared into the first-quarter quota. Including unused tonnage rolled over from the previous quarter, this quota totalled 574,550t, with just 46,934t currently unused, meaning that 527,000t is utilised. This suggests that material shipped from India in February will predominantly comprise the April-June quota of 294,662t. Vessel tracking data show that India shipped 404,582t of flat-rolled products to the EU in February, although the data do not give detail by product. Indian material could theoretically use one-third of the other countries' quota in April-June too, under the safeguard regulation. That quota will fill quickly again, as has been the case in recent quarters. Longer shipment times mean that most Indian material shipped in the second half of February — 215,170t of flat-rolled — will arrive after 1 April, and either be cleared or held over until the next quarter: after day one, any material cleared above the quota amount pays a straight 25pc duty, so it is likely that some will be held over from April-June and clear into the July quota. Vessels going round the Cape of Good Hope rather than sailing through the Red Sea will take an average of 45.5 days to arrive at EU ports from India in April, according to data from Kpler. Vessels arriving by the Red Sea in January were taking around half this time, or even less. This means that around 189,000t of February shipments could be cleared into the April-June quotas on 1 April, plus tonnage held over from the current period, totalling 46,934t for HRC. Assuming that all the material shipped in the first half of February is HRC, the quota would not overfill on day one, even with the material held over from this quarter factored in. But it is expected to fill later in the month. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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