Hot rolled coil (HRC) prices are still trending up in the EU market due to tight supply from both local mills and foreign suppliers. Domestic deal prices have recently exceeded levels that were last seen two years ago, while late last week steel giant ArcelorMittal pushed up its offers to €650/t ex-works for all Europe.
According to sources, transaction prices for hot rolled coil (HRC) have reached €570-580/mt ex-works in northern Europe and €550-570/mt ex-works in the Italian market, respectively up €5/mt and €10/mt on average compared to December 3.
All European mills are now sold out for first quarter shipments and in several cases lead times even extend into May in northern Europe. Market sources have commented that, after reducing their production in the second quarter this year due to Covid-19 lockdowns, local producers did not increase their outputs to the previous levels when pent-up demand surfaced from June onwards (especially from the automotive sector). Several service centers as well as distributors' associations have complained that the European Commission should allow more import volumes to come into the EU in the future as many end-users risk not being able to get the material they need in the coming months.
In fact, import activities remained subdued due to high offers, safeguard quotas, and the ongoing investigations on ex-Turkey HRC, even though the lack of locally produced HRC has pushed European buyers to purchase some import material recently. The reference for HRC import prices in Italy is currently €560-580/mt CFR, while it is €580-600/mt CFR in northern Europe, according to sources.