UK HRC: Market jumps on higher offers

UK hot-rolled coil (HRC) prices increased quite dramatically this week on firmer offers for April arrival.

One domestic UK producer has pushed its offer up to around £450/t ddp West Midlands for S275 HRC, a level that buyers are unlikely to pay given the more meagre gains seen in the outsell market. Prices of cut speed-stock sheet are in a £420-440/t ddp range, although some are targeting slightly higher.

One northern European mill has pushed its HRC price from the £410/t ddp level for February-March to around £435/t ddp. A northwest European re-roller has moved up to a very similar level, while a large European steelmaker is indicating around £445/t ddp — again, more than likely an unworkable level for buyers.

Another European steelmaker claims to have increased its offer by around €90/t into the UK this year alone. The mill moved up by €50/t and then another €20/t, after which it claims to have sold 10,000t, so added another €20/t. After the latest increase order intake has stopped, but the mill is not desperately hungry for tonnes.

One domestic mill with slab arriving in March had indicated it would offer around £413-414/t ddp West Midlands to some buyers, but this is reportedly closer to £420-430/t ddp.

Russian material was offered at £440/t ddp West Midlands with duty included a week or so ago, but the mill has now increased its price, and the new offer will be closer to £460/t ddp. No business was concluded at the lower level, according to sources. Turkish offers are around £465/t ddp West Midlands +/- £5/t, for April shipment, again too expensive for buyers.

Buyers have been spooked by the higher prices, and those that were covered for the first quarter have tried to hold off. Some see the current ramp-up in offers as a blip, with mills trying to gain leverage for any remaining contractual talks for the first half of the year. And there are still questions about demand and whether it will support higher prices, despite the sell-side push and firm imports.

But those that need April material are currently considering their options and realise cheaper material will be hard to find, so are likely to commit soon.

Argus' weekly domestic UK HRC assessment jumped by £15/t today to £430/t ddp West Midlands.