Domestic HRC prices have kept soaring in the EU market, surpassing the all-time-high that was recorded in mid-2008, just before the global financial crisis. Transaction prices are currently at €810-850/mt ex-works, up €25/mt compared to one week ago, and up about €450/mt compared to mid-June last year, when prices had hit bottom. Late last week, ArcelorMittal increased its HRC offers to €900/mt ex-works, up €50/mt and €80/mt compared to its previous offers in northern Europe and in the Italian market, respectively. Market sources believe transaction prices will reach these levels within a short time, on the back of tight supply and good demand. Lots of European producers are sold out until August-September, and have stopped offering material while waiting for the market situation to gain clarity, as they are trying to figure out whether they will be able to fulfil current orders or not. At the same time, even many service centers have suspended their sales. Sources added that recently the Suez Canal blockage and the Liberty Steel crisis have increased fears of supply tightnesses across Europe. Meanwhile, buyers are concerned about getting the material they need to continue their operations, and so they have been willing to pay higher prices, sources explained.
HRC prices in Europe have also been supported 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. Moreover, the increase in freight rates globally has reduced the competitiveness of import offers. Nevertheless, last week Russian steelmaker Severstal sold a total of 40,000 mt of HRC for May production to northern Europe at $900-915/mt FOB. Afterwards, Severstal sold about 15,000 mt of its early June production at $955-960/mt FOB. Also, Egypt’s Ezz Steel has recently sold around 30,000 mt of HRC to Italy and Spain at $905/mt FOB for June-July shipments, while a Turkish producer has sold around 5,000 mt of HRC to southern Europe at $890/mt FOB for July shipment. In general, "it is now impossible to find offers below €800/mt CFR southern Europe," one trader commented.