Continued tight supply for hot rolled coil in Western Europe has further pushed up prices for the flat product over the past 10 days.
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Hot rolled coil heats up
Some producers’ offer prices from late last week are now at least €900 ($1,060) per metric ton exw. Meanwhile, delivery times extend as far out as October, market participants said.
Cold rolled coil is on offer for €980 ($1,155), they added.
“It’s impossible to get anything before June,” one trader said.
Hot rolled coil offers in mid March reached €850-900 ($1,000-1,060) for May rolling and June delivery. However, traders warned then that the price and lead times were not certain and could rise further.
Import offers for hot rolled coil are now $900-910 cost and freight (CFR) for European ports. That is up from $890-900 transacted earlier in March for material from India and Japan, respectively for May and June delivery, sources also noted.
Import prices could also face more increases, a second trader warned.
“Nobody has steel – not the Russians, not the Arabs,” that trader said.
Concerns mount over Liberty Steel crisis
Causing concern for buyers in Western Europe is the fate of Sanjeev Gupta’s Liberty Steel Group.
The group has steelmaking and flat rolling assets in the United Kingdom, Czech Republic, Poland, North Macedonia and Romania.
The group’s main financial backer, Greensill Capital, in early March filed for insolvency protection. The collapse prompted concerns over the steelmaker’s future.
Liberty last week also started to request upfront payments from buyers, reports indicate.
The UK government late last week rejected a plea by Liberty’s parent company, GFG Alliance, for a £170 million ($234 million) rescue loan.
“Nobody knows what is going to happen there,” the first trader said.
End users and traders are now booking even more material to hedge their positions in the event that Liberty’s European assets stop operating, the first trader added.
Suez Canal blockage aftermath
The container ship Ever Given’s grounding March 23 in the Suez Canal is not likely to impact flat rolled steel prices in Western Europe.
That is because lead times on new steel transactions from domestic and import markets are several months out, participants also said.
Salvage crews were able to refloat the ship March 29, news reports said. However, the grounding created a bottleneck for seaborne freight between Asia and Europe.
One way that the incident could possibly impact steel imports is in shipping prices, which one trader described as “out of control.”
Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?