HRC prices have been increasing in the EU market during August, despite the traditional summer hiatus for trading activities. Local producers have been able to achieve higher prices due to several factors, i.e., the uptrend of iron ore prices (which almost reached $130/mt last week), lower domestic output, an improvement in local demand, and the lack of competitive import offers.
According to market sources, this situation has led the main European producer ArcelorMittal to seek prices of €500/mt ex-works in northern EU and €460-470/mt ex-works in southern Europe since last week. This translates into a $40-50/mt increase compared to the previous offer levels. Transaction prices are supported by the significant increase in the offer prices. Compared to early August, transaction prices have risen from €390-400/mt to about €420/mt in the Italian market, while they have increased from €410-415/mt to €430-440/mt in northern Europe, all ex-works.
According to the sources, domestic HRC prices could continue to increase supported by the positive outlook. In fact, demand is expected to improve starting from September. However, some sources have pointed out that, if an excessive amount of output capacity comes back online in the coming weeks, the uptrend of prices may be undermined. Moreover, the increase of local HRC prices may create room for import activities.