EU coil buyers question uptrend sustainability
Coil prices are currently climbing in northwestern Europe but some observers express doubt over the sustainability of the uptrend.
ArcelorMittal’s price announcement of €820/tonne ($877) for hot rolled coil has been followed by other mills, according to a Dutch service centre (SSC) buyer. One argument for mid-term stability is rising prices for imports from Asia, and delivery times stretching to 4-5 months, he says.
A Swiss trader, however, cautions there could be a contrary effect with imports. The low prices until December encouraged orders from India, which will arrive later in spring, along with additional volumes not yet pre-sold and free for the market, he tells Kallanish. However, if buyers in Europe are reserved because of real demand remaining shaky, the stockists of this additional material may reduce prices to shift volumes, thereby pulling down prices.
Another factor is the “comeback” of blast furnaces. “Spanish customers tell me the mills are fully booked, and of course they are, when they are running at half their capacity,” a Scandinavian trader points out. But that should soon change, given the run-up of blast furnaces at four mills since January, including Gijón, “with more material coming onto the market soon”, the SSC buyer says.
However, he also points at one previously unforeseen and macabre factor – the earthquake in Turkey/Syria and its devastating consequences. The damage to road infrastructure leading to Turkish mills and to Iskenderun port will mean inquiries are redirected to mills in other countries for material normally bought from Turkey, he says. He even believes this incident encouraged northwest European mills to go for the latest price hikes.
More free articles from our archive
More Global Prices
Take a Free trial
Get daily steel news redirect to your inbox each day,
along with prices.