EU HRC: Some buyers secure rollovers for January

Some European service centres have already secured price rollovers for January deliveries from November-December levels.

Purchasing managers in the north have pushed for further price cuts from current spot levels, but mills are holding firm. Argus' daily northwest Europe hot-rolled coil (HRC) index rose by €1/t to €413.50/t ex-works today.

The prompt month-forward price was assessed at €414, while December and January were static at €425 and €431, respectively.

The daily Italian index rose €1.75 to €387.75/t ex-works.

In the north, some original equipment manufacturers have tried to conclude first-half 2020 contracts at current spot levels, but mills are pushing back firmly. Some steelmakers are actually trying to shift contracts to shorter terms or link them to indices to avoid locking in lossmaking spot. Automotive sub-suppliers are reticent as they want to mirror their sales agreements with customers, but they also do not want to acquiesce to declines of as much as €80-100/t.

Two mills in the north can offer competitive material for December delivery, at about current spot prices.

Import offers into the north are about €400/t cfr Antwerp. Buyers have pushed for lower, but mills are not budging because of the Ilva situation and rising scrap costs.

Import prices into the south are exceeding those in the north, a strange phenomenon caused by the production disruption in Italy that required some buyers to rebook replacement tonnes. This seems to be affecting mostly larger buyers that are more exposed to Ilva.

One Italian buyer said he was in negotiations with a Turkish mill at about €400/t cfr, but offers have risen to as high as €420/t cif from Turkey and Egypt. An Indian mill has pulled back from the market to assess the situation.

A trading firm has inquiries for 140,000t into Italy, which is not far off its yearly volume. Trading firms and service centres are trying to ascertain the correct price for their stocks, given the perception of tight supply and domestic mills pushing for higher levels.

One Italian mill has sold some small cargoes at about €400/t ex-works, and another is pushing for €420/t ex-works, although buyers are hesitant to book at the moment. While some expect ArcelorMittal's Taranto plant to shut, others expect some sort of deal to be reached, and the company will have to fill its order-books by dropping prices.

A trading firm confirmed it had sold a small lot at €420/t cif Italy for inventory.