The Christmas and New Year holidays have already started in the European and US markets. However, before the holidays started, the flat steel markets witnessed significant price increases, mainly triggered by hikes in oil and raw material prices, as well as by inventory replenishments. In line with the expectation that raw material price increases will continue also in January, it is foreseen that flat steel prices will likewise trend upwards in the first month of 2011.
Reviewing flat steel prices in December, SteelOrbis has learned that in southern Europe hot rolled coil (HRC) prices increased to the level of €540/mt ($711/mt) ex-works, before the holiday. The most rapid price increases were witnessed in Turkey. In the Turkish flat steel market, HRC prices, which stood at $660/mt in early December, have increased up to the price range of $720-730/mt ex-works by the last week of December.
SteelOrbis has learned from market sources that last week in the Far Eastern markets, HRC export offers from South Korea were standing at $670/mt FOB, while HRC offers from Taiwan were at $640-650/mt FOB, with boron-added HRC offers from China at $640/mt FOB.
SteelOrbis has also heard that flat steel producers in the CIS have at the end of December closed their sales for January production HRC, having concluded sales in the price range of $610-640/mt FOB.
Although initial price increases received a positive reception from buyers, as price increases have continued to gain momentum a greater degree of caution has started to be observed among buyers. While producers are expected to continue to reflect increased costs arising from higher raw material prices in their own sales prices in January, it is as yet unclear to what extent buyers will accept these increases in the New Year.
€1 = $1.317