The EU coil market remains quiet amid the typical summer season and September is not seen bringing a major change, with observers keeping their expectations modest.
“I feel like demand will slightly pick up, but there will not be a big jump – the main reasons [as previously] for demand weakness remain valid,” one Swiss-based source tells Kallanish. Concurring, a Scandinavian buyer considers demand from the automotive industry to be fairly okay, but sentiment in other sectors to remain weak. Both see prices from northwest European mills still hovering at around €650/tonne ($707) for hot rolled coil, with an €80+ premium for cold rolled and around €100+ for galvanized coil.
One mill source claims price levels are some €50/t above that. He also sees “relatively stable demand in most segments and very strong demand in the automotive and heavy truck industry.” However, those mills not primarily serving those sectors will be more prone to making price concessions.
One Dutch buyer notes that several EU steelmakers claim their order books are full, partly due to the holiday period and maintenance work. But he also observes that some mills are looking for new orders and wonders to what extent mills can be trusted regarding what they say about their utilisation and order backlogs. He sees current delivery times of October to November, “which does not make most buyers too nervous at the moment”.
A Belgian buyer tells of lead times into December at one mill group. But he is critical as to whether this translates to real demand. “I can’t imagine they have that many orders, so that points to deliberately reduced capacity,” he says.
Christian Koehl Germany
