Posted on 21 Jan 2020
The moves that north-western European mills are making to raise coil prices are not necessarily in step and, in some cases, any forward impetus could be followed by a step back.
“Three large steel mills announced separately, but within a few days of each other, that they will increase the base price for hot rolled coil to €480-500/tonne ($534-556/t) with immediate effect. This means an increase ranging from €40-60/t,“ a Benelux service centre manager says.
Most buyers, although conceding that prices are trending up, doubt that the target is achievable. A buyer at a German processor paints a wider picture. “Some mills are pretty quick in making big steps forward; others are slower and prefer to take an intermediate step,“ he tells Kallanish. According to him, he has heard of hikes of €70/t, but also of €30/t.
One critical factor is the ongoing negotiations for long-term contracts, which are seen dragging on. If prices negotiated there turn out to be lower than expected, it will affect spot prices immediately. “We have split our purchasing into two streams,“ the buyer explains. “We cannot wait too long [… to see] how the deals with the OEMs turn out, so we do buy some volumes now to keep our production going, but not too much.“
He, like many others, sees the current spot price for hot-rolled coil at €430-440/t, with cold-rolled and galv both at approximately €530-540/t. And while most see the uptrend as continuing, he suggests that the results of the OEM talks could as well bring a stop to any upwards movement.
Source:Kallanish
