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Northwest European HRC mills almost sold out for January - 9 December 2011

The Steel Index’s reference price for northern European hot rolled coil was €480/tonne ($639/t) ex-mill yesterday, a level it has been stable at since Friday 2 December. This stabilisation reflects what most sources surveyed by Steel Business Briefing regard as the bottom of the northwest European market.

“I feel the number of people [mills] who are not ready to continue at the ‘old’ price level is growing,” one producer says. “Nobody is buying huge volumes but people have come back and booked what they need in the last ten days,” he adds.

January and February production is available at around €470-490/t ($625-652/t) ex-works base from local mills, depending on producer and customer. Several mills have sold out most of their January production and are now offering end-January and February deliveries, producers and traders indicate.

March material is not yet being offered, but a source close to one large producer says contracts for the full first quarter of 2012 can be signed at €520/t ex-base.

ArcelorMittal has advised customers in northern Europe that it wants an additional €20/t for January and February deliveries, taking its offer prices in Germany to around €500-510/t ex-base, sources suggest. A central European mill is also looking to increase offers €20/t to €480-500/t ex-works effective for January production and February shipment, as reported by SBB’s parent company Platts yesterday.

The current euro/dollar exchange rate means imports are not really favourable, with some third-country origin material pegged at around €480-490/t cfr Antwerp. Italian coil is available at around €480/t base delivered, but mills in the country are exporting to markets outside Europe.

However, consumption remains 25% below 2008 levels and mills need to announce increases, or minimum prices, soon, or risk selling at low prices in March, one trader adds.


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