Hot rolled coil prices are increasing in Western Europe.

Hot rolled coil prices in Western Europe have continued to rise. Insecurity of supply for the flat rolled material and the European Union’s blockage of certain steel imports from Russia are pushing prices upward, market sources told MetalMiner.
In addition to other forms of steel, the MetalMiner Insights platform includes hot rolled coil prices from Europe. 

Hot rolled coil prices pick up

Mills on the continent are seeking about €1,400 ($1,540) per metric ton exw for rolling in May, one trader said. However, he warned there was no guarantee that end users would receive it at that time.

“It’s a tricky market,” the trader stated.
That quote is up almost 8% from the week starting March 15, when the same material was on offer for €1,300 ($1,430).
Cold rolled coil normally carries a premium of €80-120 ($90-130) over hot rolled coil.
Hot rolled coil’s applications include construction as well as feedstock to produce various welded pipe products. The flat rolled product also serves as feedstock for rolling of cold rolled coil.
The MetalMiner Monthly Metal Index (MMI) report includes additional analysis of steel markets, including HRC. 

Steel sanctions

The European Commission, the executive body for the European Union, implemented on March 15 an import ban on Russian steel products that were subject to safeguard measures.

Those measures included hot rolled coil. Russian steelmakers had slightly over 100,000 metric tons remaining in their quota of almost 408,000 metric tons for Q1 2022.
Mills in Asia have also pushed up their hot rolled coil prices. Transactions have taken place at $1,375-$1400 cif Europe, up from $1,360-$1,380.
Supply is coming from Indonesia, India and South Korea, the trader said.
End users are starting to push back against the increases, however. They are waiting until prices retreat from their highs before committing to real volumes.
Costs on various building projects could go far beyond originally intended budgets as a result of the increasing steel prices, the trader noted.
“Are you still going to do it? Are you also going to be able to acquire credit from banks?” he asked.
The MetalMiner weekly newsletter includes exclusive analysis and insights from the MetalMiner team, including on price movements related to sanctions and other developments in the Russia-Ukraine war. 

Energy costs support steel prices

Rising energy costs could also put upward pressure on steel prices, however, following Russian President Vladimir Putin’s March 23 announcement that his country would only accept payment for gas in rubles from countries that he described as unfriendly.
Putin was referring to countries that had imposed sanctions against Russia following its invasion of Ukraine on Feb. 24.
The president also gave the Russian Central Bank and the Federal Government one week to present a solution on moving those operations away from dollars to rubles.
Benchmark TTF Amsterdam gas was €117 ($128.71) per megawatt hour on March 23, up almost 18.5% on the day from €98.75 ($108.64).
Changes in contracts could mean that customers in Europe would have to renegotiate their euro-based agreements, thus leading to supply disruptions as talks take place.
Europe sources about 40% of its gas supply from Russia.
Energy companies with liquefied natural gas (LNG) storage facilities must also have them 80% full by Nov. 1, in order to be prepared for the next winter season, the trader noted.