Hot rolled coil (HRC) prices are still increasing in the EU market, mainly on the back of better demand, the lack of import offers, low domestic output, and high iron ore prices. Transaction prices have increased further compared to last week, both in the northern and southern European markets. In the Italian domestic market, HRC base prices have reached €430-450/mt ex-works, versus €420-430/mt recorded last week. At the same time, prices have increased from €430-440/mt to €440-460/mt in northern Europe, ex-works. Local mills are still insisting on higher prices, and they may achieve them in the next two months, most sources believe.
As mentioned, import offers are still high. Only a couple of import purchases have been recorded in Italy recently, at prices around €450/mt CFR Italy for Turkish material, while most offers (also from countries such as Egypt and India) are at €460/mt CFR according to sources. Also, one Indian supplier has closed a sale to an Italian buyer at €440/mt CFR. One source underlined that South Korea will start offering material soon, but the shipment date will be in December or January. Therefore, EU buyers are still addressing their requests to local suppliers.
As reported previously, the increasing trend of local prices may spur an increase in import activities. In fact, producers such as ArcelorMittal, Liberty Steel and Voestalpine have announced the restart of blast furnaces around Europe recently. However, some sources have commented that such resumptions will take time and will have an impact on the market in a couple of months. Consequently, local HRC prices should continue increasing in September and October, while they could weaken later, though it is still too soon to tell. Demand has been improving recently, but most sources doubt it will reach pre-Covid-19 levels before the end of the year.