Tata Steel has added £50/t ($62.50/t) its coil prices for UK customers with immediate effect, according to a letter obtained by Argus.
The fall in steel prices since mid-March and an increase in iron ore costs have “seen EU steel industry margins squeezed to unsustainable levels only experienced a few times previously in the past 20 years”, the company said.
Prices have increased in other major steel-consuming regions since May, meaning that European values are now among the lowest in the world. And UK prices are the lowest in Europe, Tata said.
“At the same time we are now seeing a stronger recovery in demand for our products than anticipated,” the firm added, suggesting that current low levels of return would prevent it from maintaining necessary levels in its businesses and supply chains.
Argus‘ domestic UK hot-rolled coil (HRC) assessment rose by £10/t last week on the back of the expected announcement, and reduced import penetration, taking it to £405/t ddp West Midlands for S275 material. The benchmark northwest European HRC index fell to a low of €384.50/t ex-works on 25 June, and has since risen to €399.50/t.