Domestic prices for hot-rolled coil in Europe increased slightly day on day on Friday February 28, buoyed by positive sentiment in the market, sources told Fastmarkets.
Fastmarkets' daily
steel hot-rolled coil index, domestic, ex-works Northern Europe, was ?,?484.90 ($530.95) per tonne on Friday, up by ?,?0.52 from ?,?484.38 per tonne on February 27.
The index was calculated based on deals and achievable prices heard in the range of ?,?475-490 per tonne ex-works, as well as bids heard at ?,?470-475 per tonne ex-works and offers reported at ?,?490-500 per tonne ex-works.
Market sentiment in Northern Europe was positive due to long lead times from domestic mills and a lack of alternative non-EU sources of material, market sources said.
Buyers have mainly been sourcing material from domestic mills due to the lack of "workable" import offers, according to sources.
Long delivery times from domestic producers - some mills are offering May-June shipment/delivery coil - have given mills leverage in negotiations with their customers and achieve price rises, according to market sources.
The latest import offers of Turkey-origin hot-rolled coil to Europe were heard at $500 per tonne fob.
But demand from end-users has not increased, market sources said, although some Northern European distributors have managed to pass on part of the price rise for coil in their deals for processed flat steel with end-consumers.
Fastmarkets' Northern Europe hot-rolled coil index has increased by ?,?5.24 per tonne since the beginning of February and by ?,?45.73 per tonne since the start of the year.
Meanwhile, Italian steelmakers have been trading hot-rolled coil at ?,?440-450 per tonne ex-works, compared with deals heard at ?,?435-440 per tonne ex-works earlier this week.
Official offers in Italy have been heard at ?,?460-470 per tonne ex-works, according to market sources.
Domestic prices for hot-rolled coil in Italy are likely to move up in March due to anticipated restocking activity in a couple of weeks. The positive outlook is also supported by a lack of competition from non-EU mills in Southern Europe, according to market participants.
But the recent outbreak of coronavirus in the north of Italy adds negative risk in the market, sources said. Although no disruption to production or deliveries has been reported yet, market participants are concerned that it will have a negative effect on the economy and therefore on steel businesses.