CRC, HDG strengthen in northwest Europe

Northwest European mills have held prices for cold rolled and hot-dip galvanized coil steady, although the target value of €900/tonne ($976) plus seems way out of sight.

Mills are maintaining pricing discipline, helped by recent outages at blast furnaces, but the weak demand on the market will not allow for clear increases. In fact, now that ArcelorMittal Belgium, Tata Ijmuiden and Salzgitter are restarting their furnaces, increased supply might stop the gentle upward movement.

Buyers in the Benelux and Germany see prices at between €830 and €870, with CRC slightly lower than HDG. One Dutch manager, however, tells of offers for HDG below that of CRC, but could not explain this effect. His observation has not been confirmed by others, although players offered several theories for such a scenario.

“It could well happen if, for example, carmakers do not call off HDG volumes reserved for them, which makes that oversupply available,” a buyer of a German processor says. Along the same lines, “there may have been too much production at some galvanizing lines, meaning mills were forced to sell off,” another German source says.

According to a manager at an automotive supplier, “cold-rolling capacities were reduced notably when mills cut back on production. That could cause such an effect temporarily,” he tells Kallanish.

Another Dutch source does not consider the observation very representative. “Especially for CRC, import offers are attractive, so that mills here won’t be able to push their prices too far up,” he says. According to Swiss and German sources, imported CRC starts at €750/t cif Antwerp, for delivery in May-June.

However, import prices are likely to rise as vessels increasingly avoid the Suez Canal/Red Sea route. This means longer freight duration at higher costs around the Cape of Good Hope, and, as one manager points out, higher insurance rates.

Christian Koehl Germany