The recent price increase announcements by northwestern European coil mills will not result in more favourable pricing of cut and slit products, market observers believe.
ArcelorMittal has informed its northwestern European customers about a price hike of €20/tonne ($23/t), taking prices to €740/t ($848/t) delivered, from €720/t previously.
Notably, the quoted delivered price considers not only transport, but also the customary standard extra charges on top of the base price, which would calculate back to a base price of around €700/t.
Some sources heard earlier indications of €50/t hikes, as have been implemented in Italy, “but that would not have worked, so they reduced it to plus €20/t,” one player says.
While that lower increase could prove realistic to support pricing for coil products in northwestern Europe, the move is unlikely to be followed by processed products, some say.
“Prices for slit and cut sheet are remaining weak, and will not rise correspondingly,” a manager of a German service centre tells Kallanish. “The demand just is not strong enough to fuel price hikes,” he says.
One buyer of strip and sheet products gives the intake price for this material at €760-780/t delivered, including a cutting/slitting fee of €60-80/t. That would suggest a price of unprocessed coil of around €700/t delivered.
The buyer adds that “service centres undercut the offers of the mills”.
