European hot rolled coil (HRC) prices have seen an upward push this week, led by ArcelorMittal, which has raised its domestic offers across the EU by approximately €30/mt compared to last month. Other European mills, especially those in the north, are expected to attempt to follow suit in the near term. However, most market sources believe that the latest offers overlook the prevailing market dynamics. With limited purchasing, delayed restocking and flat demand, the current price increases seem to be CBAM-induced rather than demand-led.
Specifically, in the local EU market, ArcelorMittal has announced its new price target for HRC at €700/mt delivered, mainly for April deliveries, up €30/mt from the previous official levels announced last month.
“The new offers remain out of step with the fundamentals, as buying is subdued, restocking is delayed until early February, and demand is steady. The price gains are CBAM-driven,” a European trader told SteelOrbis.
“It is very doubtful that the new levels will be workable,” another source said.
Meanwhile, local mills in northern Europe have kept targeting €650/mt ex-works for orders for March delivery, the same as last week. The tradable price levels for mainly March delivery coils have been estimated at €640-645/mt ex-works, up by €5-10/mt week on week, with a few transactions reported to have been done in Germany at the abovementioned levels. “Several deals have been signed at €640-645/mt ex-works, but many buyers are still expecting to achieve €630-635/mt ex-works levels, which makes the new ArcelorMittal prices at around €685/mt ex-works or €700/mt delivered uncompetitive so far,” a local traders told SteelOrbis.
In Italy, mills have been targeting €650/mt for February and March delivery, compared to €630-650/mt ex-works last week. However, the tradable price level has been estimated at €630-640/mt ex-works, up by €10/mt on the lower end of the range week on week.
In the import segment, indicative offer prices for HRC have settled at €490-540/mt CFR, compared to €490-565/mt CFR last week, while HRC import offers including CBAM costs on DDP basis have been voiced at €610-620/mt levels, depending on the supplier.
In particular, ex-India HRC offers have been voiced at $570-575/mt CFR, which translates to around €487-491/mt CFR, mainly the same as two weeks ago. Besides, offers for ex-Indonesia HRC have settled at $595-600/mt CFR, which translates to around €508-510/mt CFR, up by €5-10/mt over the past two weeks.
Offers for ex-Algeria HRC are still voiced in southern Europe at $630/mt CFR, which translates to €538/mt CFR. Besides, offers for ex-Saudi Arabia HRC have been reported at €530/mt CFR. According to sources, at the end of last week-beginning of this week, a cargo for around 20,000-30,000 mt of ex-Algeria HRC was booked at around €540/mt CFR southern Europe. According to SteelOrbis’ calculations, CBAM costs for ex-Algeria HRC default values are at around €155/mt and around €49/mt for verified values, with the CBAM certificate price at €87/tCO2e as of January 22.
Offers for ex-Turkey HRC on DDP basis, including CBAM, through traders have been voiced at €615-620/mt DDP, while offers for ex-Asia origin HRC have been voiced at €610-620/mt DDP through traders, the same as last week.
$1 = €0.85