Although trading activities are still very slow in the European HRC market, reports have been circulating in the past two weeks regarding offer price increases by domestic mills, which have been complaining about very low margins for a while. According to sources, ArcelorMittal announced this week offers at €440/mt ex-works for HRC in the northern European market and imminent price increases in southern Europe, though without giving a specific offer level. The increase in northern Europe was at least €30/mt compared to the previous official offers. Meanwhile, sources reported that late last week an Italian flat steel producer informed its customers of an imminent increase of its sale prices. For now, the workable HRC prices in the domestic market are at the €385-395/mt level in northern Europe and at €370-380/mt on average in the Italian market, all ex-works, i.e., virtually stable compared to last week.
End-user demand is still very weak in the EU HRC market, but sources explained that local producers hope that their customers will have to start to restock in the coming months. They are also relying on low import flows, on the safeguard measure amendments - that will come into force on July 1 - and the gradual recovery of the automotive sector. However, some sources believe that this will not be enough to boost sales, and that mills may have to cut their production further.
In the meantime, indicative ex-Turkey HRC offers are at €405-410/mt CFR EU, which may be considered workable only if local price increases are accepted to some extent. In conclusion, the ongoing price increases may not be absorbed, but they could be sufficient to prevent further significant price decreases.