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North HRC prices increase on higher offers, absence of imports

Tuesday, 20 October 2020

North European steel coil prices increased Oct. 20 as higher offer from mills push prices up further on supply-scarcity concerns, limited imports and high raw material costs, market participants told S&P Global Platts.

Offers from a German trader and buyer source were heard between Eur515-520/mt ex-works Ruhr, although it is not known if deals have been confirmed at this price level, with one German buyer source saying he “couldn’t believe it.”

The same source said Eur550/mt was the goal for mills starting in Q1, but that customers would be unwilling to take material at this price in the near term.

An Italian mill source said higher prices could be attributed to an imbalance between demand and offers, with offers still below demand for the moment, coupled with growing protectionist measures.

The daily Platts TSI index for HRC Northern Europe was up Eur2.50/mt on the day at Eur499/mt EXW Ruhr Oct. 20, while the daily Platts TSI index for HRC Italy decreased Eur1/mt cents to Eur485.50/mt EXW Italy Oct. 20.

Platts also assessed 62% FE Iron Ore at $119.40/mt CFR North China Oct. 20.

A leading Chinese mill has been increasing its export offers, even as buyers, depleted of inventories, inched up on their price positions to conclude bookings.

The strength of the Asian market following the Golden Week holiday has had European mills reluctant to reduce prices, with the assurance that imports from the Far East posed little threat to their domestic turf.

An Italian service center source said buy and sell-side participants were waiting to determine the effects of coronavirus as second waves spike across the continent.

“If I had a forecast for the next month, I’d say its not a good situation because demand is getting worse, and I don’t think we’ll solve the COVID-19 situation in Europe," he said. "Suppliers prefer to understand the evolution of this crisis and if it's possible to close last quarter with these [current prices], or if they have to close their contracts before a collapse in prices."

Contrary to other market sources, the same service-center source said some import offers had resurfaced, although the return has been slow compared to normal due to safeguard measures and mounting duties on foreign material – most notably from Turkish and Russian producers.

“It’s not safe in Q1 to buy material from Turkey because of the duty investigation – so Turkey are out of the market,” the source said.


-- Amanda Flint, Laura Varriale

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