Hot rolled coil (HRC) prices have increased further in the EU market in the past week on the back of the tight supply situation. Transaction prices are at €710-740/mt ex-works, up €10/mt on the upper end of the range. "The latest news about Ilva has contributed to supporting prices," one source commented, referring to the decision of a court in Italy to order the closure of the hot area at ArcelorMittal Italia's Taranto-based plant by mid-April due to pollution. Most sources believe that the plant will not be shut down, but that it may be forced to keep its production limited and that there may be a slowdown of shipments. ArcelorMittal Italia ended 2020 with an annual steel production of around 3.4 million mt, its lowest-ever total, while it aims to produce 5 million mt this year and reach 8 million mt in 2025.
As reported previously, HRC availability is at reduced levels in the EU, both from local and import sources, and buyers are struggling to obtain material. Domestic producers are offering output for late in the second quarter in the best case. The lack of import offers is due to the current EU safeguard, which is due to expire at the end of June this year, and some antidumping duties. However, Russian producer Severstal managed to sell around 50,000 mt of its April production HRC to the EU at $765-770/mt FOB. Meanwhile, according to sources, ex-India offers to the EU are at $820-825/mt CFR and some deals have been closed within this price range. Ex-Egypt offers are at €680-685/mt CFR Italy with shipments in late May/June. Finally, ex-Turkey HRC offers are around €680/mt CFR Italy for shipment in May-June, duty included, with one trader describing the price as "workable".