The European market is expected to experience interruptions in the supply of steel coils in April

Major supply chain disruptions across the European coil complex are expected in April and May due to the fires that hit ArcelorMittal in Spain and France and Tata Steel's force majeure in IJmuiden at the end of February.

This, combined with a significant reduction in coil production at Acciaierie d'Italia, one of the largest steel mills in Europe, and reduced supplies from Asian suppliers to Europe, is expected to put pressure on the value chain in the EU.

Some buyers in the automotive and home appliance sectors are experiencing delivery delays. Delivery dates for European manufacturers had already been extended until June, even before the fires at ArcelorMittal. Some European producers are already raising their hot rolled coil prices to €900/t ($979) ex-factory, but current production disruptions suggest further hikes are materializing.

Meanwhile, service centers and reel rewinders are reporting a volatile recycling market and are finding it difficult to pass on the recent increase in reel to their customers. Demand is weak, consumption is even lower, and the distribution sector, skeptical of price increases, refuses to raise prices for plate and welded pipes. The base grade for both products should be sold at prices above 1,000 euros per tonne, but the paid prices are 70-80 euros per tonne lower. A source in Italy says that difficulties in purchasing rolls may convince distributors to raise prices as well, despite low sales activity.

While coil delivery times will certainly increase in the coming weeks, the gap between import prices and European HR prices is also expected to widen. Imported hot-rolled steel from Asia is offered at a price of 750 to 800 euros per tonne, Italy, with delivery dates until August or September. However, allocations are still small, at the level of 3,000-10,000 tons. European material is quoted at EUR 870-890 per ton delivered, with southern Europe paying the bottom of the range.