Construction, automotive sectors keep West European flats in strong shape

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Ferrous Metals
hot rolled coil steel
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Prices for hot-rolled coil in Western Europe have continued their upward trend in October and November. Mills report solid bookings well into 2021, market participants said.

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Hot-rolled coil deals

Offers and transactions over the previous week on hot-rolled coil produced within Western Europe for January delivery occurred at €520-530 ($595-615), a rise from previous deals of €490 ($560), traders said Nov. 2.

“Getting a hold of a competitive offer is tricky right now,” one U.K. trader commented to MetalMiner.

Demand mainly from the construction and auto sectors have helped to maintain a strong market for the flat-rolled product, traders noted.

ArcelorMittal also announced late last week that it would seek €550 ($640) on hot-rolled coil for February production from its Gijon plant in Spain, a second trader said.

Officials at the Luxembourg-headquartered group were unavailable for comment, however, despite several attempts.

Many producers had notably reduced production and took their hot ends off stream earlier in the year as the World Health Organization declared the COVD-19 virus a global pandemic and infections of the virus rose strongly throughout Europe.

“During the first lockdown everybody expected the end market demand to significantly drop. But actually, the demand kept going,” the second trader noted.

Cold-rolled coil

Besides the construction sector, hot-rolled coil also serves as a feedstock for production of cold-rolled coil.

Bookings for the downstream product from West European mills occurred over the past week at €575-580 ($668-675), also for January delivery.

Mills had originally sought €595-600 ($690-695), as the downstream product does not enjoy the same level of demand as hot-rolled coil.

Quotas by the European Union on hot- and cold-rolled coil imports are lending further support to local prices, sources said.

Third-country bookings

Some transactions from third countries did occur, however, traders said.

Bookings on hot-rolled coil from India, South Korea have transacted at $570-580 per tonne cfr West European ports last week for December-January delivery, sources said.

Cold-rolled coil imports have carried premiums to hot-rolled coil upwards of $60, sources said.

The European Commission (EC) is also due to announce the results of its anti-dumping investigation on Turkish flats imports between Dec. 23, 2020, and January 2021, sources noted.

The EC originally initiated in May an anti-dumping investigation against substantial year-over-year rises on imports of Turkish hot-rolled coil. The investigation followed a March complaint from the European Steel Association (Eurofer).

Anti-dumping duties also are also in place for hot-rolled coil imports from China, Russia, Ukraine and Brazil.

Second-wave national lockdowns

A second wave of national lockdowns and restrictions throughout Western Europe, in response to sharp rises of COVID-19 infections, has made traders reluctant to give any further outlooks.

“The world is a little bit upside down. Of course, there might be some impact from the second-wave lockdown,” the second trader said.

U.K. Prime Minister Boris Johnson announced Oct. 31 that England would enter a second lockdown. The new lockdown will last until at least Dec. 2.

France, Belgium, and Germany also announced national lockdowns in October. Their lockdowns will also extend until various dates in December.

Italy is due to impose a national curfew in an effort to avoid a second lockdown. Meanwhile, Spain declared a national emergency and a nationwide curfew from 11:00 p.m. to 6 a.m. in October.

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