UK hot-rolled coil prices are nudging upwards, but the weak outsell market means service centres are reticent to pay more.
The Argus weekly domestic UK HRC assessment rose by £7.50/t to £400/t ddp West Midlands today.
Some service centres have sold hot-rolled sheet for the first quarter of next year at around £424/t delivered West Midlands. In comparison, import offers for Turkish material are currently at £440/t ddp and higher.
Some service centres are trying to push up outsell prices given the rise in coil costs. One told customers that it will move sheet up by £10-20/t in the first quarter. Decoilers had been hoping the quick appreciation of the UK currency after the Conservative party secured a majority in the 12 December general election would enable them to buy cheaper steel. But sterling quickly moved the other way given prime minister Boris Johnson's support for a no-deal Brexit.
European mills are talking about lead times stretching into March, and third-country imports are uncompetitive. But UK buyers are still underwhelmed by the increases sought by mills, given the lack of increase in demand.
Nevertheless, they hope the Conservative pledge to invest in former Labour regions that voted for their party, and a wider economic stimulus, will stoke some demand.
