Posted on 20 Jan 2020
Price increases for coil products in north-western Europe seen during December are continuing in January, as man observers expected. Most sources agree however that the targets now announced by mills are not realistic.
ArcelorMittal has been explicit with setting the reference price for hot-rolled coil at €500/tonne ($556/t) ex works, and claiming that it was €450/t in December. Buyers interviewed by Kallanish before Christmas would concede a level of no more than €430/t, and this scepticism has continued.
One Dutch source is outspoken about where he sees the ceiling. “Maybe prices will rise by €20-25 maximum, but that is the absolute limit,” he says. “The European mills are not fully booked and demand is not enough to support much higher hikes,” he adds.
Sources in Germany take a similar view. “We just do not see demand increasing, and neither do our competitors,” a buyer from a re-roller company says. The apparent increase in demand seen lately is rather a symptom of a seasonal restocking, he finds.
The price paid for HRC is seen at around €440/t, and buyers are preparing for increases to €450-460/t. “We are not really euphoric,“ a trader says, while adding that he would appreciate sustained increases. “We are talking about minimal volumes sold around Christmas; in those cases, the mills could well dictate prices. But when business returns to normal, the negotiations will be tougher,“ he adds.
Source:Kallanish
