Posted on 27 Apr 2020
The confusion brought by the coronavirus pandemic has made north-western European coil market players think along different lines than usual. Pricing is certainly less clear, but there are also other concerns, Kallanish finds.
Several sources from distributors and steel users say that they do not see anyone buying much, so that pinpointing prices has become somewhat futile. “For us, it is more a matter of managing our input, rather than worrying about pricing,” a buyer at a profile maker tells Kallanish. “There is a big delay in consumption. We are not buying, and in fact we are extending the intake [… of contracted volumes] into October already,” he says, noting that stocks at the company remain too high.
He is not alone in adopting this wait-and-see mode. Automakers have asked the steel mills to postpone material deliveries and have even wanted to cancel current orders, a steel service centre manager observes. As a result, EU mills are seeing their order books becoming thinner from day to day, thus leaving gaps in their production planning, he concludes.
“The leading mills in Europe are still trying to maintain their desired prices of €480-500/tonne ($516-538/t) for hot-rolled coil, but we see offers from various mills on the spot market with a lower price level,” he says. In fact, one mill source claims that HRC prices have not yet fallen – but probably only because no recent uptake of product has occurred. Against that, buyer sources believe the realistic price would now be from €480/t down to €450/t.
Mills are also heard attempting unusual ways of selling volumes in order to keep production lines running “Like, I heard some EU mill, probably in France, has sold a volume of 15.000 tonnes to Africa, probably Egypt, below €400/t cfr,” the SSC manager tells Kallanish. Additional motivation behind this move could be retaliation against Turkish mills who sell at that level into [… southern] Europe, he believes.
Source:Kallanish
