EU HRC: Firm imports support domestic pricing

Domestic European hot-rolled coil (HRC) prices are benefiting from continued strength in import offers, despite continuing questions about the longevity of the rise and whether it will be supported by demand.

The Argus daily northwest European index increased by €1.25/t ex-works to €462/t ex-works today, while the daily Italian index nudged up by €0.75/t to €448.25/t ex-works.

Turkish mills tabled offers in line with last week's $500-510/t fob for south Europe.

It remains to be seen whether mills can afford to resist lower bids from European buyers much longer. Market participants believe this depends on how well booked the producers are, with Turkish sellers now supposedly moving to offer April shipments. Buyers of Turkish product are eyeing the decline in scrap costs and expect it to be reflected in coil prices. A mill was today soliciting bids, but buyers were reluctant.

An Indian steelmaker has been offering into Antwerp lately, but it is unclear whether business has been concluded. Some suggest that the offer was a base price of €500/t cfr Antwerp for dry HRC. Others suggest it was actually €500/t cfr for pickled and oiled material, equating to a base price of €475-480/t cfr. It is unlikely that any buyer would want to pay €500/t cfr base for dry HRC today, as it is €38/t above the domestic northwest index. Offers into Italy have been heard at similar levels.

Meanwhile, the US has said it would "react" to an EU carbon border tax should the Trump administration deem it protectionist. The US has been sparring on trade with the EU since it imposed a 25pc tariff on all imported steel — a move that most of the market saw as protectionist. Washington has conducted a Section 232 investigation into imports of cars and cars parts, with some fearing potential tariffs in retaliation against the carbon border tax. Any car tariff would be a much larger issue for the European coil market than that on steel, given the volumes of European car sales into the US.