EU HRC: Northwest price jumps on talk of another rise

Northwest European hot-rolled coil (HRC) prices continued to firm today, as a leading steelmaker was informing customers of another potential offer increase to €520/t ex-works base.

Argus' domestic northwest Europe index jumped by €6.25/t today to €449.25/t ex-works, taking the monthly average to €441.50/t. The February and March forwards were assessed at €460/t and €467.50/t, respectively.

An offer for Russian material was heard at €455/t free on truck Antwerp, including duty, by far the most competitive quote for overseas material. Asian cold-rolled coil has been offered at €540/t cfr Antwerp for February-March shipment, but bids are substantially lower at €510/t cfr. A trader recently sold Turkish HRC into Spain at around €470-475/t cfr, S235 base.

Most domestic northwest European mills have hiked offers to the €480-500/t ex-works base range, although some are still withholding quotations to try and ascertain how much they should increase. Most northern mills see bids firming, with stockholders increasingly convinced that the uptrend has substance. One trader recently bought high-grade Asian HRC at $520/t cfr (€467/t) for the European market.

There is still some concern about sheet prices in Germany, however, particularly in the south. While some decoilers are trying to hike sales prices, others seem keen to turn material into cash and as a result are selling below replacement cost. This is likely because they have lower priced coil in stock ordered at the nadir of the market in November, but it is still something of a constraining factor.

One northwest European producer may also still be hungrier for volume than some of its competitors, though it did announce a €50-60/t hike earlier this week.

The Italian market appears to be stabilising, with service centres concerned about paying much more with sheet prices not rising and demand weak. Argus' daily index nudged up by €1.25/t today to €439.75/t ex-works.

Serbian HRC was offered into Italy at €465-470/t delivered, at parity to or slightly above domestic levels.

Opinions varied on market direction. Some traders were offloading their positions given lethargic demand, the downturn in scrap prices into Turkey and a perceived greater eagerness to sell from the country's mills. But others still said that offers were €490/t cfr and above, and expected domestic prices to strengthen given the firm global situation and rising northwest European prices. Slab prices also look set to increase in the next round of buying, which could underpin coil.