Hot rolled coil (HRC) prices have increased again in the EU market in the past few days, on the back of the lack of supply. Compared to March 5, transaction prices have increased by €15/mt on average to €740-770/mt ex-works. Offers refer to third quarter shipments. As usual, the lower end of the range refers to the prices recorded in southern Europe, while the upper end is for northern Europe. However, all EU mills are targeting higher levels, starting from €780/mt. At the end of last week, ArcelorMittal increased official offers for HRC to €800/mt ex-works, up by €50/mt from previous offers.
Market sources believe flat steel prices will remain strong in the coming months as the shortage of material will not be solved any time soon. Some sources have also expressed concerns over Greensill's financial difficulties as it affects GFG Alliance and its subsidiary Liberty Steel, and this may lead to a further shrinkage of supply in the EU market. Meanwhile, it is still unknown whether the European Commission will extend the current safeguard measures on steel imports when they expire at the end of June this year. "The picture is tremendously complex," Assofermet Acciai president Tommaso Sandrini told SteelOrbis. "We're witnessing a lack of material for all products and we don't see any solutions for this problem in the short term. It is unlikely that production will increase to a point where it can balance out the current higher demand. We are trying to convince our customers that this situation will continue and it is not due to speculation." According to Sandrini, import purchases are not a viable option nowadays, as most suppliers have aligned their offers with domestic prices and because "the risk of paying duties is too high in the case of Indian material."
However, SteelOrbis has learned that ex-India HRC offers have been at $850-860/mt CFR lately, and that deals have been closed at the lower end of the range. Meanwhile, a lot from Egypt has been sold to southern Europe at $820-825/mt FOB, although offers from Egypt are now higher, i.e., at $850/mt FOB. Meanwhile, ex-Turkey offers have been ranging from $825/mt to $835/mt FOB. Finally, Russian producer Severstal has sold around 20,000 mt of its May production of HRC in the EU at $810-815/mt FOB. Most sources agree that currently most import offers range from €750/mt to €760/mt CFR southern Europe.