Hot rolled coil (HRC) business activity in Europe has been reviving gradually after long Christmas and New Year holidays, though some local producers, in Italy in particular, are still absent with firm offers. Local and most import HRC prices have increased since the last week of the year, driven by better demand and reduced output in the EU region, and particularly by the firm uptrend globally. Besides, local HRC prices have risen further on the heels of new offers from ArcelorMittal.
More specifically, HRC offers from European mills have been evaluated at €700-720/mt ex-works, up by €50-60/mt over the past week. However, both customers in southern and northern Europe estimate workable prices at around €700-720/mt delivered, which means around €680-700/mt ex-works. “After new offers from ArcelorMittal have been announced at as high as €760/mt ex-works, most mills have followed suit, though the highest firm offers we have heard are from steel mills in northern Europe at €720-730/mt ex-works,” a market insider said.
“Many people have a feeling that ArcelorMittal will announce a new increase probably up to €800 ex-works base and the rest will follow,” a Spanish trader told SteelOrbis.
At the same time, import offers have remained rather competitive, though they have also indicated rises this week. As anticipated, Indian suppliers have increased their offers to €670-680/mt CFR southern Europe, up by around €40/mt week on week. Offers from Asian suppliers, like those from Indonesia and Taiwan, have increased as well, by up to $50-60/mt over the past two weeks, reaching around €690-700/mt CFR southern Europe. Besides, offers for ex-South Korea HRC have been heard at €720/mt CFR Spain. Meanwhile, offers for ex-Vietnam HRC are estimated as the most competitive among all foreign suppliers, standing at around $680/mt CFR or €635/mt CFR southern Europe. “Both Formosa and Hoa Phat are offering at $620-630/mt FOB, and the possibility that they have sold some volumes to Italy and Spain is very high, though there has been no official confirmation from either sellers or buyers so far,” a market source said.
Meanwhile, offers for ex-Egypt HRC have been reported at $725-745/mt CFR (€675-695/mt CFR) southern Europe, with a few deals reportedly signed at €670/mt CFR Italy. Furthermore, according to market sources, offers for ex-Turkey HRC have been reported at around €700/mt CFR.