Most European HRC producers have been testing the market with further price increases given their high production costs due to rises seen in energy costs. Besides, some mills have already started to announce output cuts to balance the market. At the same time, in this context, HRC import prices have been increasing as well, with European buyers purchasing only limited volumes, mainly from India and Asia.
Accordingly, HRC offers from European mills have been evaluated at €780-850/mt ex-works, up by €20-30/mt week on week. More specifically, prices around €780-800/mt ex-works are now more common in the Italian market, compared to €760-780/mt ex-works last week, while prices of €800-850/mt ex-works are seen in northern Europe, up by €20-30/mt week on week, although some sources believe €800/mt may be the maximum level currently. Thus, according to market insiders, a deal for ex-Italian HRC has been reported at €800/mt delivered to Germany, up by €20/mt over the past week.
“European mills state that they have the intention to do whatever necessary to keep a good balance between offers and demand. It means they are ready to put in place important production cuts,” a market insider told SteelOrbis. Notably, ArcelorMittal has recently announced numerous shutdowns of its facilities across the EU, including the shutdown of blast furnaces in Germany, Spain, France, and Poland. Meanwhile, two big Italian producers Acciaierie d’Italia and Arvedi have plans to idle their production as well.
Meanwhile, import offers have remained competitive, though they have also indicated rises this week. Bookings, however, have been scant due to long delivery times, and, according to market insiders, some European customers have faced the cancellation of contracts. By Wednesday, September 7, import HRC offers, including those from Japan, Egypt, Taiwan and Turkey, have been reported at €720-740/mt CFR southern Europe, compared to €680-710/mt CFR last week. Furthermore, market insiders have reported several deals done in Italy and Spain for ex-Japan HRC at €660-670/mt CFR at the beginning of the week. However, new offers have increased to €730-740/mt CFR levels. “We heard that there were some cancellations of orders at levels of €660/mt CFR and slightly above and, some traders that were trying to close orders, they just couldn’t confirm with the mills at the last moment,” an Italian trader said.
“Current prices will not be workable for a long time as most foreign suppliers want to increase their offers to €750-775/mt CFR levels,” another trader in Spain stated.
Meanwhile, another deal for ex-India boron-added coils was reportedly signed in Italy at €670/mt CFR at the beginning of the week. However, new ex-India HRC offers have already been heard at above €700/mt CFR level.
