Despite demand from European steel users remaining modest, one attempt for a bold increase was made in the run-up to the Euroblech fair in Hanover last week.
The market leader lifted its offer for hot-rolled coil by some €60/tonne ($67/t), on its customer portal and in some direct correspondence, Kallanish hears from German and Scandinavian buyers of HRC.
“That’s an attempt as a prelude to the trade fair; this is not unusual,” a Scandinavian buyer says. He concedes that paid market prices currently can be above €750/t ex-works, but doubts that many people will currently pay anything above €800/t.
The move was not communicated widely, and not echoed by other mills. One other mill source at the time of the fair still indicated the market price at €740-750/t and did not mention any noteworthy hike attempt from his firm.
A German service centre manager believes that the attempt has gone up in smoke. “It does not make sense other than confusing the market,” he says.
Still, many sources do believe that mills in the longer run can bank on rising prices and demand, although at a slower pace. Lead times are seen at three months now although one mill manager tells of some residual rolling capacities in December.
It should be noted that spot prices are now at least €120/t above those one year ago. This is largely attributed to the EU’s measures on imports, but also considers hefty hikes of costs. According to the mill manager, costs for HRC production have risen by €100/t within one year, and for hot-dip galvanized by as much as €130/t, with the zinc price roughly tripling in that period.
Still, these factors stand against the ongoing lack of demand, and the difficulty of handing down price hikes to steel consumers. “With the end of the year in sight, many European steel buyers remain cautious about their purchases… and prefer to keep their inventories low,” a Dutch service centre manager states.
