Europe: Steel mills conclude HRC contracts with automakers for H1CY23

European hot-rolled coil (HRC) contract prices for automobiles were concluded at around Euro 820/t ($871/t) on exw basis for the first half of next year (H1CY23), down by Euro 180/t ($191/t) from H2CY22. However, buyers are actively negotiating and aiming for a cut of Euro 220/t ($234/t).

Some of the steelmakers have changed their contract periods with automakers to 6 months from 12 months.

The spot prices of HRC rose by Euro 15.5/t ($16/t) to Euro 673.5/t ($715/t) exw-Northwest Europe, while prices were up by Euro 8.25/t ($9/t) to Euro 641.75/t ($682/t) exw-Southern Europe. In addition, the long-term contract prices have exceeded Euro 700/t ($744/t) levels as on 22 December, 2022, which has made some of the manufacturers to lower their offers to Euro 650-680/t ($691-722/t) in order to narrow the gap between spot prices and long-term contract prices signed with automakers.

It is anticipated that the first half of CY23 will see accumulation of inventories as response from buyers is not good, while the contracts with automobile manufacturers are likely to be closed by March 2023.

Furthermore, buying activities shall resume from the second week of January 2023 in Italy as most of the market participants will be away amid the New Year holidays.

Note: This article has been written in accordance with an article exchange agreement between SteelDaily and SteelMint.