EU HRC: Mills pull back

Some hot-rolled coil (HRC) producers have totally withdrawn from the market, as import prices into south Europe firm on rising scrap costs.

The Argus daily Italian and northwest European indices were stable today at €418.75/t ex-works and €427.50/t ex-works, respectively.

Some participants have adopted a wait-and-see approach in anticipation of further Turkish imported scrap price volatility, which would eventually trickle into Europe as well. Italian scrap prices have already risen by a minimum of €10/t since mid-November.

At least three EU HRC producers have withdrawn export offers into Turkey, where domestic HRC prices have risen sharply and some buyers have been urgently seeking tonnes and lower-priced alternatives.

Turkish material was on offer today at €440-450/t cif Italy for February-March shipment, but European buyers are also holding back, as some believe the attempted hikes domestically and in Turkey are not supported by underlying demand. A large quantity domestic order was heard under negotiation late last week at €430-440/t delivered.

Two Turkish HRC suppliers confirmed lacklustre sales last week, but said some small quantity deals had been completed to regular customers. The last large quantity deals were done at $460-470/t fob a while ago, but offers rose to as high as $500/t fob in the second half of last week. The EU HRC import quota as of 6 December had a balance of 1.46mn t, which compares with 1.54mn t on 3 December.