Hot rolled coil (HRC) prices have climbed further in the EU domestic market compared to last week, on the back of the persisting lack of supply. According to sources, local transaction prices have reached €870-900/mt ex-works, up significantly by €35/mt on average compared to late last week, i.e., before the Easter holidays. As a result, buyers have accepted to pay prices close to or at the €900/mt level that ArcelorMittal had been targeting since March 26th. Some sources believe the producer may announce a new price increase by the end of this week. Most other European producers are not giving offers as they are sold out until late in the third quarter. Consequently, local buyers are still struggling to get the material they need, especially for the third quarter this year, which is why they have again been willing to accept higher prices in the past week. This situation may last until the end of this year, and local flat steel prices are expected to increase further in the coming months, according to sources. However, some sources do not rule out that prices could adjust downwards in the second half of the year due to a progressive increase in production, and also due to possible changes in the current trade measures.
HRC prices in Europe have continued to be supported also by the lack of competitive import offers, which is why several sources think the European Commission may end its safeguard or increase tariff quotas when the measures expire at the end of June. Should this happen, domestic prices may start to come under some downward pressure. Meanwhile, according to sources, the European Commission has decided to terminate its anti-subsidy investigation on HRC originating in Turkey, which has been interpreted by some sources as a signal of a possible relaxation of import measures in general. "Trade measures have absolutely no sense at this moment during which there is no supply," one local trader commented.
It should be noted that the increase in freight rates globally has also contributed to reducing the competitiveness of import offers into Europe. Recently, import HRC offers surpassed €850/mt CFR and even €870/mt CFR southern Europe in the case of Turkish offers, for July-August shipments.