EU HRC: More northern mills announce increases

Northwest European hot-rolled coil (HRC) prices continued to firm today, as more leading steelmakers advised their sales teams to target levels close to €500/t ex-works.

Having signed half-yearly and annual deals at the bottom of the market, mills are trying to ensure any remaining contractual business — as well as spot — is concluded at firmer pricing.

One mill told it sales team to push for a €50-60/t increase this morning, while another informed its staff to target €500/t ex-works yesterday.

Argus' daily index firmed by €0.50/t to €442/t ex-works, taking the monthly average to €440.50/t.

Most northwestern mills appear to be fully booked for the first quarter, with some now quoting arrivals for the first half of April. Others are withholding their offers, expecting to return with higher levels on the back of high import offers and firmer apparent demand.

Service centres now are generally more eager to procure, with the uptrend solidifying, fearing availability tightening headed into the second quarter. Some are more eager than others, having withheld purchases at the end of last year on the expectation of softer prices going forward.

Import offers have been tabled as high as €500/t cfr from Asia and elsewhere, for late April arrival, which is unattractive in terms of price and arrival date.

Suppliers to the automotive industry report some good dispatch days of late and that demand is not as low as it was last year.

While the price uptrend in Italy recently has been quicker, it appears to be based on little in the way of concluded business: sell-side sources confirm customers are reticent to pay more and are in no hurry to place, despite most elements being in place for an increase. Some service centres say demand remains muted, meaning it will be harder to pass on high replacement costs in sheet prices.

There is talk of bookings at €460-470/t delivered, but for small cargoes. Offers have been made at €460-480/t ex-works on an individual customer basis.

Argus' daily domestic Italian index rose by €3.50/t today to €438.50/t ex-works, taking the discount to northwest-origin material to just €3.50/t, the lowest level since Argus began its assessment.

Despite high Turkish coil prices, some expect to see orders into Europe materialise this week, but perhaps by trading firms taking positions again, rather than buyers, as lead times are too long for them to take risk and prices too high compared with European suppliers.