European HRC price increases supported by raw material costs and uncompetitive imports

Western European hot rolled coil prices increased in August, supported by high raw material costs and uncompetitive import offers. Trading activity is slow, as is traditional during the summer holiday period.

Steelmakers continue to operate at a low level of capacity utilisation, following the production cuts witnessed in the past few months. Buyers suggest that mill delivery lead times are at approximately eight weeks.

The availability of material is tightening in Belgium. Domestic service centres remark that a continued recovery in market demand will be required to sustain the recent price hikes. French coil stockists purchasing prior to vacations were forced to accept a proportion of the mills’ proposed price rises.

Most UK distributors report that their July sales volumes were healthy. As in Germany, the construction industry in the UK is one of the strongest steel-consuming sectors, at present. Hot rolled coil traders contend that import offers, from suppliers in Italy and Turkey, are expensive.

Delivery lead times are extending in Italy, as steel output remains low. A lack of large volume purchases is observed. Nonetheless, buyers expect that the upward price trend will continue, in the near term. Spanish hot rolled coil basis values increased, for delivery in September/October and local producers are now asking for a further increase for November supply.

Other flat products follow a similar trend

Plate prices were either stable or increased slightly, through early August, in most of Western Europe. Market inventories have returned to manageable levels and plate producers are unable to absorb additional cost increases supplies for raw materials and steel slabs.

The cold rolled coil market is weaker than its hot rolled and hot dipped galvanised counterparts. Nonetheless, rising feedstock costs should provide a boost for this product, in the near term.

Hot dipped galvanised coil prices increased this month. Demand from carmakers and automotive subcontractors is gradually recovering, partly as a result of government support packages.