In recent weeks the gap between hot rolled coil (HRC) prices in southern and northern Europe has shrunk. According to market sources, currently in Italy HRC base prices are at €470-480/mt ($531-542/mt) ex-works, while in northern Europe they are between €490/mt and €500/mt ($554-565/mt) ex-works. On the whole European territory, however, demand still appears weak and transaction volumes remain extremely low. Nevertheless, ArcelorMittal is reportedly discussing internally a possible new increase that could be announced next week.
“Honestly, I am puzzled by the opportunity for a further price increase by ArcelorMittal” commented Tommaso Sandrini, President of Assofermet Acciai. “The current price by ArcelorMittal is not being accepted by the market” he added.
As previously reported, at the end of May the steel giant announced further production cuts in Europe on the basis of low demand and an increase in costs linked to an increase of imports. However, import activities are currently non-existent in the face of non-competitive offers. HRC coming from Turkey and India are offered at €490/mt ($554/mt) CFR Italy or higher levels. “There are no transactions” underlined Sandrini “The weakness of the European market, contrary to what EUROFER continues to say, does not depend in any way on imports, but it is due to the total absence of demand”.
As regards to cold rolled coil (CRC) and hot dip galvanized (HDG) coils, base prices in Italy are equal to €555-565/mt ($627-638/mt) ex-works. In the downstream market, end users buy little volumes and do not make long-term commitments.
“Until the summer holidays begin…” added the President of Assofermet Acciai “I expect the market will remain challenging. From my point of view, the ongoing price increases are probably going to be absorbed, but with a lot of difficulty”.
€1 = $1.13