EU HRC: Market digesting Taranto force majeure

The European hot-rolled coil market is still digesting ArcelorMittal's force majeure declared on 11 July.

Argus' domestic Italian index was static at €454.25/t ($511.57/t) ex-works, while the northwest marker was also unmoved at €474.75/t ex-works.

Part of the plant was seized for investigation, while blast furnaces two and four were stopped, as workers went on strike on 11 July.

The demand-supply dynamics across Europe have been unbalanced for most of this year, so production cuts, extended summer maintenance, and the force majeure could help restore some balance.

With import arrivals slowing and expectations they will be even lower over June-August, HRC supply in Europe is widely expected to tighten up into September. But there are no signals that demand will strengthen much, which continues to constrain appetite somewhat.

Nevertheless, some buyers are taking imported tonnes in the belief that domestic prices will rise going into the fourth quarter. A deal was concluded for Asian material at €475/t cif Antwerp, while a Japanese mill sold rerolling grade material into Portugal around €450-460/t cif effective basis.

Two Italian mills have closed August production books and are mulling increases for September, although it is unlikely they will have large allocations, considering August production levels are anyways typically some of the lowest during the annual maintenance period.