On March 4, prices for domestic hot-rolled steel (HRC) in Europe increased due to expected supply disruptions caused by the conflict in the Middle East. European roll manufacturers are expected to withdraw offers soon and return for higher prices.
Transactions with HRC in Northwestern Europe were concluded at prices ranging from 690 to 710 euros per ton, with most of the reported figures ranging from 700 to 710 euros per ton. The deals were concluded for small batches of material, several hundred tons per batch.
.The prices reached are 20-30 euros per ton higher than the deals concluded a week earlier[url=https://mccloskey.opisnet.com/content/article/European-coil-and-green-steel-round-49].
Some buyers reported that the largest European manufacturers of rolled products have begun withdrawing offers from the market. But the metallurgists did not confirm this information.
European rebar factories have unanimously withdrawn their offers from the market.
Flat rolled steel market participants believe that rolled steel producers will do the same or try to raise prices again, as the latest deals have almost reached the target prices of 720-730 euros per ton.
"The buyers did not want to put up with the price increase[of around EUR700/t ex-works]. But now the situation has completely changed. The volumes offered are limited, and buyers would agree to higher prices now, because they understand that after a while the supply will become even more scarce due to the lack of imports and high prices in warehouses," said the distributor.
Some major traders have stopped offering imported coil from European stocks, preparing for higher prices.
Expected delays in the supply of imported steel to Europe due to the change of route from the Suez Canal to the Cape of Good Hope, as well as rising transportation costs and energy costs, helped steel mills achieve higher prices for HRC. Market sources estimate that steel shipments to Europe from Asia and the Middle East may take another two to four weeks compared to initial expectations.
Opinions on the market are divided, as some believe that a delay in imports for a couple of weeks will not have a significant impact, and the price increase was mainly a panic reaction of some buyers. Others, however, point out that the timing of possible delays is crucial, as the new EU quota system is expected to enter into force from July this year.
Under the new quota system, it was proposed to reduce the volume of supplies by 47% and double duties to 50%. The lack of detailed information on country-specific quotas or any restrictions on global quotas made European importers extremely cautious about steel shipments in the third quarter. Delays
