Hot rolled coil (HRC) prices in the European market continue to be supported by the lack of competitive import offers and by reduced supply. However, local sources said that the uptrend recorded in the past three months could slow down due to some steelmakers restarting plants that were idled, and also because the recent demand revival has been mostly due to restocking activities. As reported previously, in the past week ArcelorMittal resumed operations at two blast furnaces, one in Fos-sur-Mer, France, and one in Bremen, Germany. Both have been restarted due to better demand and to compensate for the halt of a blast furnace in Ghent, Belgium, due to relining operations. On the other hand, the former Italy-based Ilva plant (run by ArcelorMittal Italia) is producing at historically-low levels, while the newly-replaced EAF at Italy’s second-largest flat steel producer Arvedi has not been started yet. As reported by Italian steel producers' association Federacciai, flat steel production in Italy is down 3.5 percent in August and down 20.8 in the first eight months of 2020, both year-on-year. This, coupled with the still high levels of HRC import offers, has kept pushing up domestic prices. It is also worth mentioning that local buyers are cautious towards ex-Turkey offers since the material may be hit by retroactive tariffs starting from mid-October, as reported previously by SteelOrbis. At the same time, ex-India offers are still pretty high according to buyers, i.e., at €490-500/mt CFR Italy. However, market sources reported that Vietnam's Formosa Ha Tinh Steel, which has been actively seeking to sell to the EU lately, has sold 30,000 mt to an Italian producer at €475-480/mt CFR. This is the first big sale from this destination to the EU and the cooperation may continue, according to sources.
In the Italian domestic market, HRC base prices have reached €470-480/mt ex-works, up €10/mt from last week. At the same time, prices have increased from €480-490/mt to €480-495/mt in northern Europe, ex-works. Currently, local producers are seeking price levels of €490-500/mt in the Italian market and of €520-530/mt in northern Europe.
HRC prices have been trending up in the European market since the end of June, increasing by about €100/mt in the past three months.