UK HRC: Some mills target increases, others rollover

UK hot-rolled coil (HRC) prices are starting to track gains in northwest Europe, with most mills pushing for hikes and service centres trying to increase sheet outsell prices by £20/t.

Argus' domestic UK HRC assessment rose by £2.50/t today to £415/t ddp West Midlands for S275.

Service centre margins have widened, with cheaper coil now being slit and demand higher than in November and early-December.

One UK mill was aiming for a £40-50/t increase, taking its S275 offer to around £450/t ddp West Midlands. Another northwest European mill is seeking a similar increase, which would take its offer to £450-460/t ddp. Mills suggest intake has been stronger, and that they hope for a 'Brexit boost' as the UK and EU governments attempt to minimise the impact of the UK's withdrawal from the bloc.

A source at one service centre said a domestic mill was offering HRC with a lead time of 3-4 weeks, which would suggest it is not as full as most believe. This was unconfirmed.

The higher offers make sense against most import quotes, which are around £470/t ddp, give or take £5-10/t. But imports from one region are likely to be priced below £450/t ddp West Midlands, and another domestic mill has slab arriving that it will roll into HRC and offer at just above £413/t ddp.

Some other western European sellers have also agreed to roll over February prices, at £410-415/t ddp for certain decoilers.

Cold-rolled coil (CRC) looks tight in the UK, with several service centres suggesting it will be difficult to buy below £500/t ddp. An Italian mill offered into the UK at £490/t last week, and this price may have now moved higher, while another European steelmaker offered at £480-490/t, but this may no longer be available. Outside Europe CRC is tight, with an Indian mill carrying out maintenance on a line and Asian material in short supply.