Reports of a new €50/tonne ($59) coil price hike by the market leader are yet to reach some northwestern European market participants, but sources were anticipating an increase after mills fell silent last week.
Last week, various buyers told Kallanish that some mills had left the market after collecting sufficient orders and were not providing new quotes or replying to enquiries. “They know how to play the game, and it changes daily,” one said. The tactic is not alarming buyers, however, as demand remains weak and they feel in no rush to conclude purchases.
“Mills played a bit of stop-and-go to test the market for the price they can realistically ask for, and to avoid betting too low,” one buyer notes.
The mark of €700/t ($828) for hot rolled coil, as defined by the market leader, was not yet achieved in transactions, and yet that supplier is now quoting €750, according to some sources (see separate story).
Still, “as we [transactions] were coming nearer to the €700 defined earlier, it does make some sense to ask for even more at an early stage,” one German manager says. He notes that he has not heard of the latest hike himself, neither directly nor through others. But, “knowing how the game goes, only this morning I imagined something like this would come soon.”
So far, German market participants see the upper end for HRC at around €670/t, while €680 is heard from the Benelux. When some mills previously left the market, they meant to return with a new offer soon. This was expected to be €700, according to a Dutch manger, or still below that, according to a German source. Neither foresaw €750/t.
Nevertheless, it will not mean a sudden leap, “but a phased repositioning of the price level”, the Dutchman says. He expects that offer validity periods will be shortened, discounts reduced, and delivery times stretched as rolling schedules are well-booked.
