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Review: European Steel prices trending upwards in December

By ScrapMonster , 2017-01-20 05:25:29

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European steel prices had a strong end to 2016, trending upwards in December. Regional steel producers continued to push increases to their coil list prices, and some mills in Northern Europe started to test close to €600 a ton as the new offer level for HRC.
North and South European HRC indices finished the year at €555 a ton and €530 a ton respectively, gaining €241 a ton and €249 a ton from their lowest points at the beginning of 2016.
European steel producers continued to push through higher asking prices for coil products throughout December, leading to significant increases in spot HRC prices. North and South European HRC indices finished they year at €555 a ton and €530 a ton respectively, the highest levels since March 2012.
December closed out a year of steady growth of steel prices in Europe, as TSI’s HRC indices gained 77% and 89% in Northern and Southern Europe compared to where they started the year.
At the beginning of the month, ArcelorMittal implemented a new €20 a ton increase to its coil prices, bringing the HRC target level close to €575 a ton.
Another large North European producer was heard hiking its HRC offers even higher, to close to €600/ t. Many buyers deemed this price level as too high, and preferred to stay out of the market. However, lower-priced offers soon disappeared from the market, leading to increases in spot HRC prices, even though activity remained muted.
HRC offer prices from South European producers were heard to increase to €530-540 a ton by mid-December, while import offers were quoted close to this level.
Negotiations for yearly automotive contracts were still ongoing at the end of December, as steel producers were reportedly seeking increases of around €200 a ton over last year’s level.
Early in December the European Commission announced the start of an investigation into imports of corrosion resistant steel, or HDG, from China. According to European Steel Association (Eurofer) data, coated steel imports from China between January-October 2016 totalled 1.9 million tonnes, up 69% y-o-y, representing 50% of total imports into the EU.
The German Association of Steel Distribution (BDS) reported that flat steel inventories, held by its members, remained mostly stable on a m-o-m basis in November at 1.44 million tonnes. Sales of flat products improved in November, totalling 586kt, up by 8% m-o-m.
The manufacturing sector in the Eurozone had a strong end to 2016, as IHS Markit reported that its PMI indicator finished the year at 54.9, the highest level since April 2011.
Commenting on results, IHS Markit noted the broad-based nature of the upturn, as PMIs improved in all countries surveyed, and attributed much of the improvement to the depreciation of the euro, which made European exports more competitively priced.
Source: ScrapMonster

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