Northwestern European coil buyers anticipate an interruption in import offers, while some tell of favourable offers to be had from local steel service centres.
Observers tell Kallanish the big foreign suppliers into Europe have seemingly left the market, and “returned” recently-placed orders. “From what I heard, they stopped issuing offers simultaneously just before Christmas, to come back in January, to ask for a three-figure increase,” one source says. This applies to the large Korean, Japanese, Benelux, and other international players. “I heard their customers anticipate €100/tonne ($106) on top, which could mean €750/tonne for hot rolled coil,” he adds.
A manager at a trading company does not necessarily see a sudden leap, but confirms that prices rose prior to year-end, and keep on rising. Whether fast or slowly, any increase in import prices could be a push factor for domestic European prices. In the weeks towards the end of 2022, many import offers had already surpassed €600/t and encouraged EU mills to lift their offers towards €700/t.
Currently, annual contracts with mills have either been signed or are still under negotiation. According to the buyer of a big automotive supplier, some such contracts have worked out better with service centres than with mills. “They have secured spot contracts with the mills into the second quarter at the previously low prices, and are more flexible,” he says. While annual contracts with mills were €200 under last year’s, those with the service centres were €240 lower.
Going into January, deals are expected to work more in favour of sellers, with a year-on-year difference now of probably €150/t.
Christian Koehl Germany