Hot rolled coil (HRC) prices have continued to increase in the EU market in the past week, on the back of low supply and strong demand. Compared to seven days ago, achievable prices in the domestic market have increased by €60/mt on average, from €1,030-1,050/mt to €1,100-1,150/mt, both ex-works. On May 19, the market leader ArcelorMittal increased its HRC offers by €50/mt to €1,150/mt ex-works. However, SteelOrbis has learned that at least another producer in Europe has already raised its offers to a higher level, and, according to sources, ArcelorMittal may push its prices up further this week.
As reported previously, European mills have mostly been avoiding offering material in the spot market. At the same time, distributors have become increasingly cautious as they do not want to risk buying material that they would receive at a time when prices could be significantly lower, i.e., from September onwards. In fact, it is still uncertain whether the current EU safeguard on steel will be in place after June 30 this year, although a proposal on extending it is likely to be unveiled by the end of May. Its expiration or relaxation, combined with local mills ramping up production in the coming months, could lead to increased supply levels in the market, eventually leading to price decreases. Moreover, some players fear a change in the situation in the light of the recent price decreases in China. According to one trader, import activities may increase in the coming period, as “I’ve heard that some purchasing groups are preparing to buy ex-Far East flat steel with long delivery times,” as one source commented. However, other market sources have underlined that the supply situation is not going to improve in the short term, and so the peak price is yet to be reached domestically. Currently, import offers from various sources are at €1,080/mt CFR minimum.