Another NW EU HRC mill to hike offer

A leading northwest European steelmaker is increasing its hot-rolled coil (HRC) offer to €450/t ex-works.

The mill is informing customers of lead times stretching to September based on its reduced production.

It is holding some supply for September as it believes it can secure higher prices by waiting.

Customers suggest the mill will close order books at current market prices until buyers pay more as it is sufficiently well booked. The rises are needed to move away from unsustainable prices, and on the back of firmer demand and high costs, the company told buyers.

Mills are fuelling talk of limited availability into September and the fourth quarter as imports of HRC from key regions, such as Turkey, are impacted by the reviewed steel safeguard, and as buyers encounter firmer demand.

There is an overhang of supply in the automotive supply chain, but given how quickly it ground to a halt from mid-March, service centres have run down inventories and are returning to the market to try and secure material ahead of further increases.

Argus' benchmark northwest European HRC index rose by €1.75/t to €396.75/t ex-works yesterday, up from a low of €384.50/t on 25 June.

US exchange operator the CME Group's north European HRC contract, which settles against the Argus index, traded at €443 and €442 for the first and second quarters of 2021, for 200 t/month, yesterday. The fourth quarter was at €432 today, according to the bid-offer spread.

By Colin Richardson