EU HRC: Italy uptick poised to extend to north

Market participants expect last week's uptick in Italian domestic and import hot-rolled coil (HRC) prices to translate into higher levels in northern EU, but buyers in northern Europe are still in a wait-and-see mode.

The Argus daily assessment for northwest European HRC edged down by €0.25/t to €508.25/t ex-works. Argus assessed the ex-works Italy differential to the ex-works northwest European price at minus €27.75/t compared with minus €28/t on 15 February.

Prices out of Italy are giving direction to those in the north, and have recently risen on the back of increased export offers from Turkey, and some buyers reportedly booking material at higher prices from the domestic market.

But sales from Turkey to Europe have been limited this month, which might prompt Turkish mills to lower prices and could in turn affect the improved sentiment in Italy, and negate the recent rise.

A bid at $550-560/t cfr Antwerp today was not considered by Turkish producers, but a trader said this level could be workable later on in the week. This would equate to around $530/t fob compared with offers on 15 February as high as $580/t fob.

With bountiful HRC import volumes under the EU's quotas available, the safeguard measures are unlikely to alone stimulate an increase in the domestic market. Data shows that as of 15 February there is only 327,800t awaiting allocation compared with a quota balance of 1.3mn t.