EU HRC: Raised import offers fail to move market

Increasing hot-rolled coil (HRC) import offers into Europe are not causing panic among buyers, who can still procure domestic material at more competitive levels despite recent increases.

Most producers hiked offers last week, but are struggling to convince customers to accept a full increase: some say €420/t ex-works can still be found on the market in Italy, with imports heard possible at €430-440/t cfr, despite most offers being higher.

Argus' daily Italian HRC index nudged up by €0.25/t today to €419/t ex-works.

Turkish material is available at €440-450/t cif Italy, but is not attracting interest. As scrap prices continue to increase into Turkey, with a US east coast deal done at $295/t cfr for HMS 1/2 (80:20) today, mills might even push for higher levels: they have already done so domestically, where demand from re-rollers and tightness in CIS supply has supported prices.

Prices are edging up in the north as mills manage to make some first-quarter sales and move out lead times, but there are concerns about the sustainability of the rises. Argus' daily northwest Europe HRC index rose by €1.25/t today to €428.75/t ex-works. The lowest import prices are around €430/t cfr, but these are not interesting for buyers, especially considering discharge and inland transportation.

The current monthly average nudged up to €426.25/t, while January and February were assessed at €440/t and €450/t, respectively.

Service centres cannot pass off any further increases, and are reluctant to pay any more. As a result they are shortening their purchasing programmes, procuring a month worth of material rather than two.

In Italy, market participants await the outcome of an upcoming meeting between the government and ArcelorMittal on the future of the Ilva assets. A strike is planned by the workers for 12 December, when the Italian ministry of economic development and the steelmaker will also meet to negotiate the industrial plan. Demonstrations were held in Rome today by some of the workers.