The price rise seen in Europe's long products market has also started to be seen in the prices of flats products in this region. Indeed, it is matter of some concern how high flats prices will go in Europe, where the local markets were characterized by calm for a long time. It seems that European prices, which are lower than the prices in the Middle East and Far East, due to low demand, will start to rebound. It is inevitable that the mills will reflect the rises in raw material prices in their product prices. The rise in raw material prices is also the reason why Russian and Ukrainian mills hiked their prices for March/April shipments.
HRC prices in the local Italian market, which stood at €455/mt ex-works in December, are expected to rise by €20-30/mt in January. Although the Italian market has not revived as expected following the Christmas holidays, it seems that the market has begun to show slight movement.
Demand for flats in the UK is stronger than demand in other European countries. HRC prices in the UK were at $700/mt ex-works last week. The expectations are that the prices in the UK market will increase, particularly in the second quarter.
Bulgarian steelmaker Kremikovtzi, whose latest offers for HRC stood at the level of €440/mt FOB Burgas for Europe, is currently holding back its offers for Europe due to the expectations that ArcelorMittal and Riva Group will announce price hikes. Demand in the local Bulgarian market is moderate. The sales price of hot rolled sheets in the local Bulgarian market is at BGN 1,020/mt ($770/mt), excluding 20 percent VAT. On the other hand, the sales price of hot rolled coils is at BGN 980/mt ($740/mt), also excluding 20 percent VAT. Looking at other east European countries, we see that a revival has recently started in countries such as Poland and Romania. The demand situation in these countries will become clearer in the coming days. Due to the expectations for a revival, trading firms in Bulgaria, Romania and Poland are expected to resume purchases of import materials. In another sale heard last week, Slovakian producer U.S. Kosice concluded a sales deal for HRC of 2 mm and above sizes to Tunisia at $795/mt CFR on 90-day deferred payment basis.
It seems likely there that the European market will gain momentum after the mills hike their prices. We will see how demand from buyers and end-users will respond in the coming days to these expected price hikes.