Hot rolled coil prices in Western Europe have not slowed their upward trek over the past month. Demand continues to outstrip supply for the flat-rolled product, industry watchers said June 1.
“It has everything to do with high demand in Europe and the United States,” one trader told MetalMiner.
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Rising hot rolled coil prices
Sources confirmed prices for hot rolled coil at €1,120-1,130 ($1,370-1,385) per metric ton exw for rolling and delivery into Q4. That compares with hot rolled coil prices of €1,000-1,020 ($1,225-1,250) in May.
Cold rolled coil is now carrying a premium of €125 ($150) per ton over HRC, sources indicated.
The auto and construction sectors are behind the high demand, one source said.
New registrations for passenger vehicles within the European Union rose by 218.6% year over year in April to approximately 862,226 units from 270,651 units, the European Automobile Manufacturers’ Association (ACEA) stated on May 19.
Restrictions from the COVID-19 pandemic in April 2020 were the main reason behind the increase, however, the association noted.
“Indeed, despite this big percentage increase, last month’s sales volume was almost 300,000 units lower than that recorded in April 2019,” ACEA added.
New passenger vehicle registrations for the first four months of 2021 rose by 24.4% to 3.42 million units from 2.75 million units, ACEA noted.
Supply chain pressures across the auto industry, particularly for raw materials, are also pushing up prices for Tesla automobiles, reports quoted the automaker’s CEO Elon Musk as claiming May 31.
Tesla’s main production site is in California. The company also has an operating plant in Shanghai and plans in 2021 to open an additional one in Berlin.
Germany’s construction sector has also reported difficulty in timely sourcing of necessary materials. For example, there have been shortages of steel, the Munich-based Institute for Economic Research said June 1.
“In building construction, 43.9% of companies reported in May that they were having problems procuring construction materials in time. This is up from 23.9% in April and just 5.6% in March,” the Institute for Economic Research stated.
Rising iron ore prices, the main component in steelmaking, have also translated into higher costs for steel.
Benchmark 62 Fe iron ore finished last week at $205.73 per metric ton cfr China. The price marked a more than 15% jump from $178.80 on April 28. The raw material’s price also achieved a high of $218.38 on May 12.
Sources believed that prices would continue to rise at least over the next two months,
“Every [metric] ton of steel that you have, you can sell,” the trader said about current market conditions.
Prices are likely to slow in August as most of Europe is likely to be on holiday at that time, the trader added.
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