PRICING NOTICE: Proposal to adjust European HRC specifications to accommodate longer lead times

Fastmarkets proposes to increase the flexibility of the delivery time specifications for its European hot-rolled coil (HRC) indices to accommodate the longer-than-usual lead times seen in the market at the time of publication in early April 2021.

The methodologies for the Fastmarkets steel hot-rolled coil index, domestic, exw Northern Europe, and steel hot-rolled coil index, domestic, exw Italy, state that only prices for material delivered within six weeks will be considered.
Lead times are currently much longer than this, however, because of severe material shortages and strong demand. In both Northern Europe and Italy, the earliest delivery times currently available for HRC is August, with some producers only able to offer as late as November.
Moreover, this situation is expected to persist until at least the end of 2021.
Consequently, Fastmarkets proposes to retain the six-week delivery specification under normal circumstances, but to consider longer lead times when no material is available for delivery within six weeks.
The proposed specifications are as follows (amendments in italics):
MB-STE-0028 Steel hot-rolled coil index, domestic, exw Northern Europe, € per tonne
Quality: Grade s235jr, 1,200-1,300mm, thickness 3mm; standard extras for dimensions excluded
Quantity: Min 50 tonnes
Location: Ex-works Northern Europe (defined as Germany, the Netherlands and Belgium)
Timing: Up to 6 weeks (longer delivery times will be considered under unusual conditions when no material is available for delivery within 6 weeks)
Unit: € per tonne
Payment terms: Typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard.
Publication: Daily, 4pm London time
Notes: Only material offered to/traded within Northern Europe, as defined above, will be considered.
MB-STE-0892: Steel hot-rolled coil index, domestic, exw Italy, € per tonne
Quality: Grade s235jr, width 1,250-1,500mm, thickness 3-4mm; standard extras for dimensions excluded
Quantity: Min 28 tonnes
Location: Ex-works Italian mills
Timing: Up to 6 weeks (longer delivery times will be considered under unusual conditions when no material is available for delivery within 6 weeks)
Unit: € per tonne
Payment terms: Typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard.
Publication: Daily, 4pm London time
Notes: Only material offered to/traded within Italy will be considered.
The consultation period for this proposed amendment starts on April 12 and will end on May 12. The amendment will then take place, subject to market feedback, on May 14.
To provide feedback on these indices, or if you would like to provide price information by becoming a data submitter, please contact Maria Tanatar by email at: pricing@fastmarkets.com. Please add the subject heading ‘FAO: Maria Tanatar, re: European HRC indices.’
To see all Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/about-us/methodology.

Ross Yeo

ross.yeo@fastmarkets.com

Published

Ross Yeo

April 12, 2021

13:22 GMT

London