Hot rolled coil (HRC) transaction prices have remained strong in the European market as local producers are still trying to implement their price increases, citing higher raw material costs and low margins. Domestic demand is still relatively weak, above all due to sufficient stocks at distributors and service centers, and low capacity utilization rates in major consuming industries, such as the automotive sector. However, producers believe that trading activities will improve after the summer break. They are also supported by the lack of competitive import offers after the amendments to the EU steel safeguard that came into force on July 1. As a result, European buyers prefer to buy domestic material, also due to the shorter lead times involved.
“Supply is not so high considering that some plants have not resumed production yet," one source commented, also adding that Italian flat steel producer Arvedi has been carrying out works since mid-July in order to replace its EAF.
HRC transaction prices are mostly at €390-400/mt ex-works in the Italian market, while they are at €400-410/mt ex-works in northern Europe, both stable compared to late last week. However, most transactions are now being closed at the higher end of the range. Official offers are still at €400-420/mt and at around €440/mt ex-works in southern Europe and northern Europe, respectively.