Review of European roll and environmentally friendly steel: European roll prices rise on CBAM, new quotas
Roll prices in Europe increased in the week to January 30, as the extension of roll delivery dates further increased the number of supply offers in April.
According to reports, only a few steel companies have remaining allocations for the first quarter, which have concluded deals for March shipments of hot-rolled coils (HRC) at a price of about 650 euros/ton from the plant. High inventory levels limited the possibility of higher supply prices in the first quarter, especially given the reluctance of end users to accept rising steel prices.
It is reported that cold-rolled and hot-dip galvanized (CRC/HDG) coils were completely sold out in the second quarter, resulting in a significant premium to the HRC price, which ranges from 750 to 760 euros per ton from the factory.
It was reported that the plants are targeting a minimum price of 700 euros per tonne from the factory or with delivery for HRC, depending on location, and 800 euros per tonne from the factory or with delivery for CRC/HDG, according to indicative supply proposals in the second quarter.
HRC prices in Italy also increased over the week, maintaining parity or a small discount compared to prices in the Northwest.
"Prices are slowly rising, but in fact the pace is not increasing, because customers have enough of them in stock," said a distributor from Benelux. "However, everything will change as soon as new import quotas are introduced."
The European Commission's proposal to replace the existing EU steel protective measures was approved by a Parliamentary Committee with amendments earlier this week and must now be considered by the European Council. This would give the European Commission the right to continue negotiations with its WTO trading partners in order to achieve the desired increase in the base tariff rate on steel to 50%, which is necessary before July, when the current protection measures expire.
Thus, market participants are almost unanimous in optimistic expectations regarding steel prices in the second half of this year, as the implementation dates are extended after the expected entry into force of the proposed reduction in steel import quotas by 47% in July.
"Demand remains weak, but the mood is optimistic," the German distributor said. "Lead times are increasing, and when factories close their order lists for March, they will have better reasons to raise prices further."
Distributors, as a rule, were more positive during the week, although they still complained about a decrease in steel consumption, and one German distributor explained that the return of production times at the plants to the traditional level allowed the company to preserve stocks, reducing the capacity of end users.