The veritable chaos seen in the European steel market over the past three weeks has shaken some customary relationships between product groups.
The latest semi-official announcement by the market leader last week still seemed to reflect familiar price premiums. With hot rolled coil offered at €1,400/tonne ($1,548) ex-works, cold rolled coil was set at €1,500, and hot-dip galvanized coil at €1,550. However, at the time of the announcement, higher offers were already heard for all groups, Kallanish notes.
This is especially true for HDG, which was offered by one mill at a massive €2,500/t, according to a manager at a German distributor. This is difficult to reconcile with the latest production stoppages at carmakers. OEMs, whose operations were already hampered by the semiconductor shortage, face an additional problem procuring wire harnesses for cars, produced largely in Ukraine.
“I think mills are taking advantage of panic reactions,” the manager explains. Some projects cannot wait and will pay almost any price to procure steel; however, few actual transactions occur at such peak prices, he believes. A similar effect was heard in the plate market, with some offers in Europe leaping to €2,000/t last week.
Meanwhile, the widened premium for pickled over HRC base prices does not seem to play much of a role anymore. By February this premium had gone up to €50/t, from the traditional €20-30. Both Benelux companies that offer independent pickling services were heard as fully booked. However, one source points out that “they receive a lot of material from Russian mills. So, if those supplies are blocked now, this may again release capacities for regional customers”.
Christian Koehl Germany