HRC prices trending higher in Europe following mills' announcements

Wednesday, 04 December 2019 15:49:24 (GMT+3)   |   Brescia
       

Global steel giant ArcelorMittal has announced a €30-40/mt increase in its coils prices in the European market. In particular, this means for Italy its spot offers for hot rolled coil (HRC) have reached €430/mt ex-works. The steel giant has justified the move citing an increase in import prices, slab prices, reduced supply and an upturn in apparent demand after several months of huge destockings.

Meanwhile, an Italian mill has increased its offers by €30/mt to €440-450/mt ex-works for the first quarter of 2020 on the back of higher slab prices. Currently, in the Italian market HRC transaction prices stand mostly at €410-415/mt ex-works, against €405-415/mt ex-works a week ago. One of the market players interviewed by SteelOrbis said that, although end-user demand is still weak, in recent weeks there has been a modest increase in purchases by service centers and distributors. Added to this are production cuts - the most recent concerning the ArcelorMittal Asturias plant in Avilés, Spain - and the increases in import offers that have been recorded in the past two weeks. According to market sources, HRC offers from Turkish producers have increased from a level of €430-440/mt last week to €450/mt, both CFR Italy.

Finally, there is the uncertainty surrounding the Taranto-based Ilva plant, at least until the end of the ongoing meetings between the Italian government and ArcelorMittal aimed at reaching a new agreement. What is certain, according to most market players, is that the annual production of the Taranto-based plant will definitely be below the 6 million mt that ArcelorMittal guaranteed last year.

As for northern Europe, HRC transaction prices have increased slightly, from €415-425/mt to €420-425/mt ex-works. Prices should increase further in the coming weeks both in northern and southern Europe, on the heels of local producers' announcements. However, consumption is still low and most buyers have now covered their needs for January.


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