European flat steel producers are increasing their CRC and HDG prices owing to stronger demand from automotive sector buyers, sources told SteelOrbis. In particular, leading producer ArcelorMittal has increased its HDG offers by €40/mt on average this week to €1,160/mt in northern Europe and to €1,140/t in Italy, both ex-works. Another producer in eastern Europe has announced rises in its offers.
Meanwhile, supply contracts between EU mills and the automotive industry have been closed at higher levels. These same contracts were delayed from the beginning of the fourth quarter of 2021 until now due to the significantly higher prices asked by suppliers compared to one year before and the uncertain situation due to the shortage of semiconductors globally.
However, no rises have been observed in the HRC spot market, where activities have remained slow after the holiday break, while supply is higher and import competition is stronger. Prices have been trending sideways compared to January 5 at €810-920/mt ex-works, with levels of €810-830/mt in Italy and €900-920/mt in northern Europe. On the one hand, demand is still low, while on the other hand European producers have high production costs, and for this reason they may cut their output in the coming weeks, according to some sources. Meanwhile, import offers remain quite competitive, i.e., at around €760-780/mt CFR Italy, especially for Indian material with shipment in late February. Offers for northern Europe have been reported at levels above €800/mt CFR.