Posted on 03 Jul 2024
European coil prices are currently stagnant, but there are indications that certain producers in Europe are suspending sales or considering raising prices.
One producer halted sales last week, and there are rumours circulating about ArcelorMittal's prices for hot rolled coil being at €670/t base delivered and hot-dip galvanized coil at €780/t base delivered. Other HRC mills in northern Europe are considering price increases, in line with re-rollers and coil derivative producers. According to sources, European domestic prices are holding steady at an average of €620-630/t base ex-works or delivered.
EU third-quarter safeguard quotas for a number of Asian origins are expected to be filled quickly. A limited number of import contracts have been signed at an average price of €600-610/t ($642-653) cfr.
Contract price increases for coil, tube, and sheet are now expected following the renewal of safeguard quotas starting from 1 July. Buyers of HRC are currently calculating the duty that needs to be paid. Some Italian buyers have the option to cancel their customs clearing authorisations for a portion of their purchases. As a result, a number of re-rollers and service centres are contemplating the idea of leaving some of their purchases at ports in order to reduce import duty payments.
Based on feedback from buyers interviewed by Kallanish, the average duty to be paid will amount to approximately 8%, which is equivalent to €50/t. Choosing not to clear material through customs can be a difficult decision. Several sources are projected to experience a shortage in HRC supply for the upcoming quarter, which could reflect in multiple EU countries.
Re-rollers and sheet producers are striving to boost values despite sluggish consumption downstream. They have so far managed to recover approximately €30/t on tubes, equating to 2.5 points of discount. However, with the significant increase in HRC costs, this is insufficient to boost margins. Several Italian tube-makers are implementing production cuts. Some companies are planning to implement stoppages of three to four weeks, in addition to the production cuts scheduled for July.
Price increases for HRC have been expected since the European Commission proposed in late May to extend the EU safeguard measure on steel by a further two years. This was confirmed last week (see Kallanish passim). It has also introduced a 15% cap per origin over the “other country” HRC tariff-rate quota.
Source:Kallanish
