The deterioration of coil prices in recent weeks is notably slowing down and could soon come to a standstill altogether. Although this is not certain, some buyers are preparing to face the first week-on-week increases in offers from mills.
One Dutch manager, for example, tells of “an increasing number of contacts and insiders who believe that price increases are in the offing.” And he is more concrete with it: “There are rumours that one of the larger producers in the EU will soon start offering a base price that will be €50 ($51) or more per tonne higher than the current daily prices.”
While this new twist is not yet common, it might soon be. It would not automatically mean a resurge, as only “the coming weeks will show whether the market will accept this,” the manager notes. However, often enough, such signals help to stabilise prices and keep them from softening further.
Little wonder one mill source to Kallanish expresses optimism that an appreciation of prices is around the bend.
“We hear from customers that they intend to replenish their inventories, and we hear from carmakers that the shortage of semiconductor chips has been overcome now.”
His optimism is founded on a modest assessment of current ex-works prices of €850+/t for hot-rolled coil, and slightly under €1,000 for hot-dipped galvanised. While galv offers reported from the market were still higher recently, German buyers largely agree with the assessment of HRC, with some lower-priced deals heard from Austria.
Christian Koehl Germany