EU HRC: Central European mill eyeing increase

A central European steelmaker is planning to increase its offers by €5-10/t for April production, up from current sales into Germany of around €485/t on a delivered basis, citing tight supply and a lack of imports.

The mill has been informing customers that deliveries will not be impacted by the coronavirus, after being asked whether orders will be delayed.

Recent currency fluctuations have attracted hot-rolled coil (HRC) offers from India into Italy, with participants reporting a wide range of offers — €460-485/t cfr, or $470-490/t fob.

These levels were not workable for buyers, and nor were Turkish offers. The latter are at $500-515/t fob for May-June shipment, depending on the mill, and mills are in no rush to sell as they watch how scrap costs develop. Despite currency volatility, import offers were only €10-15/t below domestic offers, short of the gap of around €30/t needed for buyers to import.

The gap between Italian mill prices has widened, with one selling at €450-460/t on a delivered basis, while others are pushing for €450-460/t ex-works.

The Argus daily Italian HRC index slipped by €1/t today to €445.50/t ex-works, while the northwest European index nudged up by €0.25/t to €484.50/t ex-works.

Traders expect a shortage of material in Europe to emerge once coronavirus concerns ease and buyers return to the market — stocks in Italy seem low, but weak confidence is dissuading buyers. European mills also expect logistical difficulties to constrain import penetration, with many vessels tied up at ports in Asia and elsewhere. One northwest European seller claims to have booked tonnes for big commodity buyers at around €505-510/t ex-works, for those that still need to buy. Some buyers have been scrambling to replace bookings with Italian mills or imports for domestic steelmakers to ensure timely arrival, steelmakers suggest.

A large Russian mill will be taking reheating furnaces off line at one of its mills that produced large coils this year. It has four furnaces and will take one down at a time, with a production loss of around 50,000 t/month, according to traders.

source: Argus Media