EU HRC: Some mills refuse to deal at recent lows

The northwest European hot-rolled coil (HRC) market rose slightly today as mills firmed their offers for spot tonnes amid second quarter contract talks.

One re-roller said it would follow ArcelorMittal's latest €30/t increase, partly because of rapidly rising slab costs.

Argus' daily northwest Europe HRC index rose by €0.25/t to €508.25/t ex-works.

Previous levels of €510/t ex-works are no longer available, given surging import costs and rising raw material costs, according to one steelmaker.

Indian material is being offered at €495/t cfr Italy, and at €505/t into Spain, and is transacting at these levels. Turkish offers into Antwerp have far exceeded €500/t cfr, with some re-roller offers heard as high as €530/t cfr as they try to pass on higher slab costs.

Argus' weekly southern European HRC import assessment rose to €495/t cif.

But buyers are still sceptical of any uptrend in Europe, despite clear external justifications. Lead times are still short, with mills looking to fill their rolling programmes, and the latest increases are deemed by some to be a further attempt to stabilise pricing.

Automotive demand is down by at least 10pc on last year so far, according to a supplier to OEMs.

Buyers also point to macroeconomic uncertainty, such as Italy's recession, the UK's exit from the EU, Spain's snap election and Germany's recent manufacturing sector contraction. As a result of these factors, most are trying to keep stocks as low as possible despite subdued end-buyer demand.