Coil distributors and processors are becoming impatient about the prices being pushed by European mills, and yet more so about a material shortage which is not understood, they tell Kallanish.
In particular, buyers have little sympathy with the reasons given by mills for the supply shortage, considering since autumn most idled blast furnace have come back on stream.
“The mills’ performance is surprisingly poor, even the premium mills,” says one German buyer. “Why is that so, when the books are full?” Quite recently, high water on some rivers and a cold winter period in northern and eastern Germany were cited by mills as obstacles. Because of that, Salzgitter declared force majeure, and thyssenkrupp Steel’s management wrote “a really wild letter”, as the buyer puts it. “But then, those periods lasted for little longer than one week, so how could it come that far?” he asks.
A Dutch manager uses the word “shrewd” for what he deems to be the mills taking advantage of the current shortage and trying to maintain this situation. He adds that stoppages at some mills will contribute to the shortage, citing current repair work at Belgian rolling mill NLMK until March, and maintenance announced by Turkey’s Colakoglu for May.
He fears that mills may furthermore go for summer maintenance plans despite the current shortage. In fact, one major blast furnace revamp in that period has already been announced by thyssenkrupp Steel.
