The softening of coil prices from extremely high levels in northwestern Europe is progressing at distributors, while mills keep claiming relative stability.
“With every call I make, I bring prices down by €10/t ($10.53/t),” a manager at a southern German distributor tells Kallanish. He notes that the sale price level is still very high and profitable, based on restocking made early this year. Hence, distributors are more prepared to make concessions, whereas mills are striving to keep prices up under the pressure of still-rising input and energy costs.
Ex-works price asked for hot-rolled coil is now at €1,300/t.
“I have not heard of anyone paying that,” a trader describes the upstream market lull. A Dutch source sees €1,250/t as the more likely price fetched locally now. Prices of cold-rolled coil and galv are seen at €100/t above HRC by many, though the Dutch source believes that they are weakening faster, with only €80/t premium over HRC.
One northern mill source claims that colour-coated coil and processed galv meant for colouring is actually high in demand for construction, and compensated losses on the automotive end.
The lack of demand from the automotive industry leaves especially the service centres with full shelves of CRC and galv, and an inclination to catch orders that otherwise would be made at mills. This again will force the mills to adjust their prices to keep their share in the market.
According to a Scandinavian source, the current mill prices are only paid for guaranteed back-to-back business, and not at all for restocking inventories.
“When the curve points downward, everyone buys only what he needs,” he says.
Christian Koehl Germany