North and South European HRC indices rise during September

ITALY October 19 2016 7:01 PM

LONDON (Scrap Register): Capitalizing on the tightness in supply, European steel producers announced a number of coil price hikes in September and were successful in achieving higher price levels.

Buyers in need of material for Q4 delivery accepted most of the increases, and North and South European HRC indices rose during the month by €23 a ton and €38 a ton respectively, said the Steel Index.

September started with announcements on increases to their coil prices by European steel producers. The first came from ArcelorMittal, which led with a €40/tonne hike. Other mills soon followed, with rises ranging €20-40/t.

For North European HRC, this meant that asking prices were set early in the month at around €450-460/t. Producers had been indicating earlier that they had only limited allocations left for Q4, and buyers were expecting prices to rise. However, many were unprepared for a big jump, which prolonged negotiations and slowed market activity.

HRC prices remained mostly flat during the first half of the month, but towards the end of September trading activity improved, and spot prices started to rise. 

Building on this improved momentum, ArcelorMittal announced a second price hike, increasing coil prices by a further €20/t, pegging HRC offers near the €480/t mark. TSI’s North European HRC index finished September at €451/t, gaining €23/t during the month, although this was still some way below producers’ targeted offer levels of €460-480/t.

As HRC delivery lead-times started to stretch towards the end of December, prices started to go up and some deals were heard to be done at €430/t and above. However, large service centres maintained that their purchase prices remained in the €410-425/t range.