The situation has not changed much in the EU hot rolled coil (HRC) market in the past week, where the range of domestic prices has remained substantially stable. According to sources, achievable spot prices are still in the €870-1,050/mt ex-works range, with the lower levels being recorded in Italy and the higher levels in northern Europe. More specifically, Italian mills are offering their December production at the lower-end prices, while they are offering January production at €900/mt and above. The lower prices for December output are due to automotive buyers having cancelled some orders, one source explained. Meanwhile, €1,000-1,050/mt ex-works is still the most common range in northern Europe.
As reported previously, the sentiment has changed in the past two weeks thanks to the expectations of restocking activities by distributors, and, although trading activities have remained limited so far, sentiment is bullish. In fact, following the decision by the US and the EU to replace the US Section 232 tariffs on European steel imports with a tariff-rate quota, market players have been expecting an increase in European flat steel exports in the coming months. This would compensate for the lack of demand from the automotive industry, leading to reduced supply and therefore higher domestic prices. Sources believe that prices will also be supported by higher energy costs and logistical challenges, and that mills are definitely seeking price increases for the first quarter of 2022.
Meanwhile, the general range of import offers has remained mostly stable at €860-900/mt (duties included) for HRC coming from various sources. As reported previously, buyers in general are still not interested in import offers due to the long delivery times and the risk of paying duties on volumes exceeding the EU safeguard quotas.