As reported late last week, EU flat steel producers have stopped offering material after the military invasion of Ukraine by Russia, fearing possible disruptions in slab supply and increasing gas prices, and also expecting lower coil import volumes. According to sources, they will come back to the market in the coming days with significantly higher offers. EU slab and HRC buyers, in particular, are expected to rush to find alternative sources of supply to cover the missing volumes.
This whole situation should lead to increased demand when EU mills return with their quotations. Last week, transaction prices for HRC were at €950-1,000/mt in northern Europe and at €870-900/mt in the Italian market, both ex-works. However, local mills were already asking for higher prices (to a maximum of €930/mt in Italy). Romania-based Liberty Galati has already increased HRC offers to €1,000/mt ex-works for April deliveries.
Large volumes of semis have been sent from Mariupol port in Ukraine to Italy, to Metinvest's subsidiaries Trametal and Ferriera Valsider, and also to companies such as Marcegaglia and Tecnosider, sources underlined. Metinvest sold more than 1.6 million mt of slab to Italy in 2021. As fighting has been taking place around the city of Mariupol and trades have been suspended, huge consequences are anticipated, not only in the EU but also in markets such as Turkey.