UK HRC: Prices hold steady

UK hot-rolled coil (HRC) prices are holding steady at the moment as import offer levels struggle to attract interest from buyers.

The Argus UK assessment is unchanged at £447.50/t ddp West Midlands today.

Erroneous reports that Turkish commodity grade HRC was being offered at £450/t ddp West Midlands for July arrival left UK market participants baffled today. There was an offer at this level at the end of April/early May, but most market participants do not believe it was a real price level and more likely to be a trader "fishing" to see what level might entice demand. Given low local pricing, traders have been struggling to make business work on commodity grade material.

With weakness in sterling because of the continuing Brexit saga, and Turkish mills increasing offers to $520-530/t fob, such levels are not possible. Sterling's depreciation has added around £12-15/t to the cost of imported material in the past week or so.

The lowest available price for Turkish material is around £480/t ddp, and perhaps higher. Offers remain unattractive compared with domestic European sources, as Turkish mills are quoting July and August shipment. EU material is available on a six-week lead time. Some traders with material on hand are selling at £475/t ddp for prompt delivery.

One northern re-roller has gone quiet after offering as low as £440/t ddp to the UK, with some suggesting it has moved to £450/t ddp. A German steelmaker has increased its offer by €20-30/t following other rises by ArcelorMittal and Marcegaglia, but would be content with a €15/t move.

Service centres still expect their third-quarter tonnages to be finalised in a range of £440-455/t ddp West Midlands depending on supplier, and do not consider price increases despite some bullish flags — iron ore is at a five-year high above $100/dry metric tonnes, and mills are cutting production in an attempt to shore up the supply and demand balance.

One buyer that tried to add additional volume to a hot-dip galvanised coil order from an Italian seller saw its request refused, as the re-roller is firm on its price policy. The German mill has brought forward maintenance on some of its rolling lines from August because of the weak market environment.