EU HRC: Sellers unwilling to commit tonnages

Some sellers in Europe are refusing to commit to larger hot-rolled coil (HRC) orders, as buyers request larger tonnages in anticipation of further price increases.

The Argus daily Italian index increased by €0.25/t to €446/t ex-works today. The northwest European index was unchanged at €460.75/t ex-works.

Service centres are reporting a consistent improvement in margins, with lower-priced material arriving booked at the bottom of the market. Buyers are waking up to the fact prices are increasing, and as a result are keener to lock in sheet supply. Underlying demand is not soaring, but is stable, while supply in Europe — and globally — appears to be falling.

A north African seller is resisting bids for large tonnages as it expects to secure higher prices going forward. An Italian buyer was targeting $490/t fob for 30,000t, against an offer at $510/t fob.

The seller has already achieved this level into Spain, market participants said, and is now only willing to settle the inquiry partially, negotiating the balance later. Some said this was because there is no allocation left, although others cited expectations that prices will keep rising.

Turkish HRC prices have been under pressure from lower-priced scrap bookings. But market participants across Europe are keeping a close eye on new scrap deals, perhaps testimony to the firming EU market as buyers seek competitively priced import supply.

Turkish offers stand at $500/t fob and above, with most material into Italy on offer at €470-480/t cif and into Iberia at €480-485/t cfr. Prices into Iberia are higher because of higher freight costs and the fact that there are fewer alternatives to imports. But mills do not want to have to drop back below the psychological $500/t fob level.

The Argus cif South Europe weekly assessment fell to €470/t today.