Sources in the European market tell Kallanish that ArcelorMittal – as well as other major suppliers – is continuing to raise coil offer levels. The move is supported by the fact that long-term negotiations for coil supply to the automotive sector advanced positively in the final weeks of last year.

ArcelorMittal is now reported to be offering hot rolled coil in northern Europe at €800/tonne ($874) ex-works, up some €50/t compared with offers registered in December. Hot-dip galvanized coil is offered at €920/t ex-works.

Further support to domestic coil prices in Europe has come from the anticipated over-utilisation of EU tariff-free safeguard quotas for HRC imports in the first quarter. Importers are expected to be forced to pay as much as 8% duties on their imports from countries such as Japan and Egypt this quarter, further reducing the possibility of this material remaining competitive in the EU market.

Several buyer sources have expressed astonishment at this quick follow-up price increase, given the economy has hardly shown signs of a major recovery in real demand. Prior to this latest increase, a Swiss trader says he saw the latest prices for HRC delivered both north and south of the Alps at €730-750/t, meaning closer to €700/t ex-works than to the €750/t ex-works envisaged by EU mills in December.

A German manager of a larger distribution group says he would have not even considered offers recently that were above €700/t, making the €800/t now targeted “out of sight”.