ArcelorMittal increases European coil prices in fresh round of hikes

London — ArcelorMittal increased all coil offers across Europe Jan. 28 in an attempt to bring fresh impetus to the currently stagnating sheet steel market.

The fresh round of moves saw offers increase by Eur20/mt to Eur750/mt for HRC, a product that saw a slowdown over the last week in a price rally that has kept the market on its feet since late last year.

CRC offers increased from Eur820/mt to Eur860-870/mt and HDG offers by Eur30/mt to Eur880/mt. Current lead times are end of Q2 for spot trades.

Buy-side and sell-side sources' initial take on the hike was that the new offers are likely to lift prices short-term but questioned whether prices will continue on a 13-year high in the long-term.

"It could be the last move AM makes before things turn south, it's the last push," said a Benelux trader.

"We need to see to what extent the market is going to react to this increase. The market is very tight on HRC and CRC, so I do think prices will remain high into Q2," said the source.

European coil prices in upswing since summer

European coils prices increased by over Eur300/mt since late June 2020, when HRC EXW Ruhr was at its lowest point of the year at Eur396/mt according to the Platts Northern European assessment. The daily Platts assessment stood at Eur715/mt EXW Ruhr Jan. 27, a 13-year high.

It is the second time ArcelorMittal is increasing offer prices this month.

"On the one hand, Western European mills are trying to increase prices, and there is real demand. If you look at stock levels, they're seeing 30-year lows for German inventories, so that's bullish," said the trading source.

"On the other hand, other markets' prices seem to be easing, there's a stand-off in slab prices from the Black Sea and we also see import offers have been coming off a bit from the Koreans, Indians and Taiwanese," said the source.

The recent slowdown in pace of the price rally comes as international steel prices are weakening slightly, with Turkish scrap seeing more heavy decreases. The Platts benchmark price for HMS 80:20 fell $69.50/mt since the beginning of the year, assessed at $413/mt CFR Turkey on Jan. 27. Turkish flat steel domestic and export prices have also fallen this month, while other export prices from Asia saw decreases as well.

One European mill source however saw the move as a positive sign for the market situation.

"The hikes show that the current sideways price movement is a temporary situation ahead of the Chinese New Year, and that there will be a strong demand boost after the new year," said the mill source.