Hot rolled coil prices may reach the highest levels seen in recent years in Europe and the US as a consequence of the US 232 decision, market sources in Europe tell Kallanish.

A re-roller says that the market is extremely quiet after the Trump administration’s announcement. This is adding uncertainty to a flat product and tube market which is already under pressure in Europe on both sales volumes and prices.  “We are all waiting for the reaction from the EU that should come shortly. If Trump puts his decision into action, we may well see coils reaching $1,000/tonne (€804.2/t) base ex-works in the States. Protectionism will also push European coil prices through the roof and this is bad news for the entire chain,” the source comments.

“The EU will certainly impose stronger barriers on imports in response to Trump. This will trigger a situation of short supply in Europe and stagnation in the market. The first reaction from a coil buyer will be to stop purchasing because the trouble is downstream. End-users won’t be able to see their selling and purchasing prices soar. The economy in Europe, especially in the South, is not strong enough to absorb soaring prices so the market would just freeze. A commercial war would have disastrous effects,” a source at a French service centre comments.

Although Europe may be impacted by Trump’s protectionism less than China and other third countries, European coil prices are expected to rise depending on any EU reaction, Kallanish hears. Domestic HRC prices now start at €550-560/t base ex-works, sources suggest.