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EU mills keep firm coil offers as the market slowly restarts - 5 January 2012

Major northwest European steel mills are keeping base offer prices for hot rolled coil above €500/tonne ($646/t) ex-works, where quotations are available, while the market remains slow this week as participants return from holiday.

The latest offers seen in the regional market have been pegged at €500-520/t ex-works base for February rollings, while some mills are currently preparing new official offers for next week. Italian suppliers are mainly silent, but one mill is currently offering HRC at €475-480/t ex-works base.

No deals are believed to have been made at either of these new levels yet. “The latest order we placed to a mill was at €470-480/t ex-works base price in the second week of December,” a service centre in France comments to Steel Business Briefing. “We are convinced mills will manage to sell at €500/t ex-works in January, but whether prices will increase further in the coming months remains unclear.”

Asked about the current situation, a senior source at one of the major steel suppliers in northern Europe comments: “We are preparing to offer HRC at a minimum level of €520/t ex-works base price.”

Stockists and distributors are believed to have medium-low stocks and are expected to place new orders by mid-January, but uncertainty remains regarding real demand in Q1 in key markets such as France and Italy.

The settlement of a number of automotive H1 contracts is expected to give a positive boost to the market, as the mills managed to keep these contracts at levels similar to the first half of 2011, SBB notes. Before the winter holidays, sources confirmed that some HDG contracts had been signed at a level of around €590-620/t ex-works base price, as reported.


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