Hot rolled coil (HRC) prices are still trending up in the EU market, due to limited supply, good order books, and a lack of competitive import offers. Transaction prices have reached €490-500/mt in the Italian market, up €5/mt compared to last week, while they have increased by €10/mt in northern Europe, to €510-520/mt, both ex-works. In both cases, mills are offering at higher levels, respectively at €500-520/mt and €520-550/mt ex-works.
As reported previously, European producers are offering their first quarter rolling material. In particular, some mills in the north are even offering their March production, according to sources. The sentiment is bullish due to the above-mentioned factors, as well as due to an increase in international prices, such as ex-China, ex-Turkey and ex-India HRC prices. Meanwhile, EU safeguard measures and the ongoing investigation on Turkish HRC are keeping imports subdued in the EU market. SteelOrbis’ sources reported that the European Commission has told the region’s governments that Turkish HRC entering the EU will face registration in a bid to avoid possible stockpiling. This measure will come into effect while EU officials continue their dumping and subsidy probes into the products. With this step, the commission can retroactively impose measures from the first day of registration should the investigations prove that dumping practices and subsidies occurred. Provisional measures are expected by January 14 for the dumping case and by March 12 for the countervailing case. Retroactive duties may be imposed from three months prior. Despite the risk of possible duties, sources have reported that some European buyers, specifically from Italy, have bought some import material recently, due to the lack of domestic supply. Italian customers are also making inquiries for Russian HRC, according to sources. Ex-Turkey offers are now at $540-555/mt FOB, while Russian producer Severstal is actively selling big coils to Europe at $540/mt FOB.
European HRC prices are expected to remain strong in the remaining part of this year as the plants that were restarted in September are not operating at their normal capacity utilization rates yet. "Mills want to keep prices firm by keeping their production at relatively low levels," commented one source.