Hot rolled coil (HRC) prices have increased further in the EU domestic market compared to last Friday, on the back of the ongoing strong shortage of products. However, after the significant rises seen in the past several weeks, the uptrend seem to have slowed its pace recently. HRC transaction prices are now at €690-720/mt ex-works, i.e., up €10/mt on average compared to January 15. These are now closer to local producers' offer prices, which are at €730/mt from ArcelorMittal and around €710/mt from Italian steelmakers, both ex-works. While producers in northern Europe are almost sold out for their third quarter material, Italian producers are still offering for May shipments. While most sources believe prices will not undergo any decrease in the short term, the changed sentiment in some raw material and steel markets globally has made buyers more cautious in the past week.
As explained previously, the availability of HRC in the market remains low due to a combination of reduced outputs since the Covid-19 lockdowns last year, the revival of demand, and the lack of competitive import offers. This, in turn, was due to the EU steel safeguard, the existing antidumping duties against China, Russia, Ukraine, Iran, and Brazil, and also the provisional antidumping duties on ex-Turkey HRC, which are currently also subject to an anti-subsidy proceeding. According to sources, HRC import offers from several sources are around €690-710/mt CFR southern Europe, which is too high to spur significant interest from local buyers, also considering the long lead times involved. Speaking of imports, it is worth noting that last week the European Commission started a review of the antidumping measures on imports of HRC from Severstal, which is the Russian producer subject to the lowest rate currently. Meanwhile, SteelOrbis has learned that 12 EU states wrote a letter to the EU executive vice-president and commissioner for trade, Valdis Dombrovskis, seeking to push the European Commission to renew the existing steel safeguard, which is going to expire at the end of June this year. Market sources in the past months suggested that the safeguard might be replaced by other measures, such as specific antidumping and anti-subsidy duties, but EUROFER believes a safeguard is more effective as it affects all imports, regardless of their origin.