Integrated mills in north-western Europe launched an attempt to obtain higher prices from customers last week, at least for hot-dip galvanized coil, Kallanish hears from the market.
“They are trying to stabilise the price in the upper five-hundreds, the market leader is even going for €600/tonne, ($664/t),” a trader tells Kallanish. “Of course, the question is will they keep it up, or give in after a short while.” In recent weeks, more than €580/t would have been hard to achieve whilst the trader suggests that the lower end could be under €560/t.
The new offer levels have not yet been heard very widely which is of little surprise in the comparatively quiet summer period. Other sources when confronted with the announcement said bluntly that it will be in vain. “It’s doomed to fail,” one buyer says. “Of course, mills are anxious not to have the price fall further, but an increase is out of the question.” Another source says that “… it’s the same game around this time of the year.”
It is possible that the move has come too early. All sources did express some hope for an uptick after the summer, come September.
HDG is arguably the coil material most under pressure from the crucial slowdown in car production. It can also however be in the forefront of any move to increase prices. “It is easier to take capacities out of the market with HDG,” the trader explains. “The hot-rolling and cold-rolling mills have large production capacities and numbers of staff to match, so the decision to stop a galvanizing line is easier."