EU HRC: Italy looking to roll over contracts

Despite the divergence in current spot hot-rolled coil (HRC) pricing in northwest Europe and Italy, Italian sellers are targeting second-half-of-the-year contracts at a rollover.

Northern mills pulled contract offers at the end of May and many are understood to now be looking for a rollover or €10-15/t increase. Contracts that have already been settled were done at a discount of up to €30/t across the continent, and end users in Italy are now targeting €30-60/t lower compared to the first half of the year.

The gap between buyer-seller expectations is likely to drag negotiations, as higher costs and lower demand see spot prices pulled in both directions.

Some northwest European mills have been particularly hungry for orders, as buyers reduced contractual tonnages, which forced the sellers to offer more material into the MENA region as well as more recently into Italy.

An offer heard today into Turkey stood at $560/t cfr — uncompetitive compared to CIS pricing at under $500/t cfr but indicative that market chatter that the producer had followed ArcelorMittal and cut summer output could be true.

The Argus northwest European index edged down today by €1/t to €477.50/t. The discount for Italian HRC stood at €5.50/t.