Mixed sentiments have been expressed in the EU hot rolled coil (HRC) market in the past week. On the one hand, as reported previously by SteelOrbis, supply contracts have been closed at higher prices year on year between EU mills and automotive buyers, which has supported sentiment and demand in the EU flat steel market in general. Moreover, local steelmakers are still aiming at price increases due to surging energy costs in the past few months. Another positive factor is the fact that mills in northern Europe have completely sold their first quarter output, according to sources. On the other hand, automotive demand is likely to remain limited in the coming period due to the persisting shortage of semiconductors globally. Furthermore, imports are weighing on the market. In the Italian market, which is usually more susceptible to competitive import offers, mills are still offering HRC for delivery in late February, SteelOrbis has learned.
As a result, HRC transaction prices have increased slightly in northern Europe in the past week, from €900-920/mt to €910-930/mt, while they have trended sideways in the Italian market, at €810-830/mt, all ex-works. Not unexpectedly, mills' offers are higher. Italian mills for instance are offering their material at €840-860/mt ex-works.
As mentioned, large volumes of import material at EU ports are having a negative impact on the European market, despite the safeguard quotas, and import offers remain quite competitive. Trading sources reported offers from Taiwan, Egypt and Turkey at around €770-780/mt CFR Italy. Also, an Indian producer has sold around 20,000 mt of HRC to Europe at around $840-850/mt CFR.