Northwest European mills are holding coil offers firm, supported by a recovery in demand from the automotive sector, and a dip in prices is unlikely anytime soon.
This is especially true for hot-dip galvanized coil, after carmakers resumed activity in summer to a large extent. “I do get the impression that demand for HDG is altogether stronger than for cold-rolled,” a Dutch fabricator summarises following talks with various business partners.
A German stockholder concurs. “Demand for galv is definitely higher; carmakers ask for it nearly exclusively,” he tells Kallanish. “Galvanizing lines are the production step with the smallest capacity, so bottlenecks occur there most easily.” He believes that “…we are not far from the €600/t [$700/t, ex-works],” which the leading mill previously announced as its target. Another buyer confirms he paid this price “…for a smaller lot.”
A mill representative claims that €600 has already been reached, and that “…smaller lots” are currently the rule rather than the exception for deals. “There is not much free capacity left until the end of the year, so you simply won’t get big lots anymore,” he says, and predicts that January will see the €600 mark surpassed.
It appears that galv is at more than the customary €100/t above hot rolled coil, which is pegged at around €480/t, with cold rolled coil fetching some €70-80 more.