Fastmarkets’ weekly price assessment for steel sections (medium), domestic, delivered Northern Europe, was €1,500-1,700 ($1,646-1,865) per tonne on Wednesday, up from €1,330-1,380 per tonne a week earlier.
The war in Ukraine has severely disrupted Europe’s supply of steel slab, which in turn was affecting HRC production and costs.
In addition, on Tuesday, the EU announced sanctions on finished steel products from Russia, including HRC.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €1,374.46 per tonne on March 16, up from €1,188.33 per tonne on March 9 and from €966.25 per tonne on February 23. Current prices were the highest on records going back to 2003.
Russian mills (primarily Severstal) exported a total of 1.99 million tonnes of HRC to the EU in 2021, according to data from European steel association Eurofer.
On top of the disruptive effects of the war, the HRC market was also beginning to feel the effects of domestic producer SSAB’s blast furnace outage in February, sources said.
With HRC prices at such astronomically high levels and with supply so uncertain, sections producers have largely been absent from the market. When offers have been made, there has been a high degree of variation between them, as shown by the wide price assessment range.
Buyers have been hesitant due to the lack of clarity and sharply rising prices, although the consensus view was that short- to mid-term demand should not be significantly altered.
Longer-term prospects for demand were very poor. With the price of all construction steels having increased substantially over the past three weeks, it was inevitable that many projects would be canceled, sources said.
One distributor estimated that the decrease in consumption in the next two-three months “could easily be more than 50%” from previously budgeted volumes.
