European heatwaves continue to rise, with quota for heatwaves exhausted in the first quarter

This week, the price of European hot coils continued to rise. Currently, the price of European hot coils is at 800 euros/ton (equivalent to 875 US dollars/ton) EXW, an increase of about 10 euros/ton compared to the previous week. Most steel mills have sufficient orders, and the actual transaction price is about 40 euros/ton lower, making it difficult to break through 800 euros/ton. Compared to the Nordic market, the southern European market is relatively quiet. The Italian hot coil quotation is 760 euros/ton, and the actual DX53D+AZ steel factory price may decrease by about 50 euros/ton. It is expected that the price difference between the north and south will gradually narrow in the future

The reasons for the continued trend of rising prices in European domestic hot coils can be divided into three main aspects. Firstly, both the United States DX53D+AZ steel and Asia are showing an upward trend in sheet metal prices, so with the rise in import prices, local prices are also rising. Secondly, in the first quarter of 2024, the quotas of the European Union have been basically exhausted. Currently, the number of declared hot coils at ports is 1.18 million tons, but the total quota is only 930000 tons. Therefore, the remaining hot coils will be subject to a 25% tariff, which will drive up prices and indirectly reflect the gradual recovery of downstream demand. At present, Vietnam, Japan, Taiwan, China and Egypt are the main suppliers of hot coils in Europe. Finally, the recent increase in iron ore prices has led to a significant increase in finished product prices. Therefore, with the support of steel mill costs, European DX53D+AZ steel hot coil prices are prone to rise but difficult to fall.