Most observers in north-western Europe agree that there has been a recent stabilisation in coil prices and they expect no significant further movement for the summer months.
“For our current contracts we had to accept a moderate increase of €10/t ($11.23/t), but due to the weakening economy we don’t dare make a forecast,” a buyer at a large German distributor tells Kallanish. Those who do venture to do so say there will be no movement ahead. On the one hand, “… iron ore prices are skyrocketing,” one sources says, but on the other, “… the automotive industry has not recovered, and stocks are high at service centres, which is why they will try to sell off as much as possible,” a Dutch manager comments.
This means a stand-off between the need by the mills to recover prices as raw materials costs rise, and possible summer sale discounts downstream at the steel service centres. “Prices will remain weak until September, and not pick up until Q4, I think,” the manager says.
According to a Swiss source, “… prices have stabilised at the average of the first five months.” This would suggest an ex-works price for hot-rolled coil of €480-490/t. For many sources in Germany, Benelux and Scandinavia these days, €480/t is the orientation price for HRC, and €580/t for cold-rolled and hot-dip galvanized coil.