Europe’s largest steelmaker, ArcelorMittal, has increased its headline offer for hot-rolled coil (HRC) by €50/t on limited import options and low domestic supply.
The company is now offering €800/t for HRC to northwest European buyers, up by €50/t from its previous offer. Hot-dip galvanised coil is now offered at €920/t, also up by €50/t. It was offering HRC at €740/t to southern EU and €750/t to the north before the rise.
The move comes as contract talks with automakers and the wider supply chain continue, with most mills trying to achieve rollovers or slight increases. Large buyers are still eyeing reductions and there is competition among mills for large original equipment manufacturer business — one large producer said it had to reduce its price for a six-month contract after being undercut by another mill.
Supply remains limited from domestic mills. UK buyers suggest that some EU mills are around two months late on deliveries, with one vessel meant for November arrival only docking in recent days. ArcelorMittal itself has had production problems, and some of its plants have been affected by strike action over the past month.
Import options are also constrained — 1.23mn t was awaiting clearance into the other countries’ HRC quota as of 8 January, compared with a quota of 923,594t, meaning that importers would have to pay a sizeable duty of around 8.3pc.
Some buyers said the new price was too rich compared with the latest deals, which largely remained below €700/t for February and March deliveries.
A price of €800/t would open the door to other exporters that have not been competitive in recent months, especially Turkey. Assuming an export price of $700/t fob and the lowest import duty for Turkish mills, they could sell slightly below €700/t cfr EU.
Argus’ benchmark northwest EU HRC index has risen since mid-October, on curtailed domestic supply and a period of restocking after months of service centres reducing inventories. It stood at €692.50/t on 8 January, up by €92.25/t from €600.25/t on 17 October. The daily Italian HRC index rose by €101.75/t from €587.50/t to €689.25/t over the same period.