It will take some time before players in the northwest European coil market develop common ground for long-term supply contracts for 2023.
“People buy only what they need on short notice these days,” Kallanish heard from a Dutch buyer at this week’s Blechexpo trade fair in Hanover. “You buy for delivery in say, six weeks, but hardly beyond that. Actually, delivery these days is often much faster because mills have little to do and need business,” he noted.
All observers spoke of high inventories that might take until the end of the year to deplete to the point restocking can begin. “And year-end also sees stocktaking, so you should ideally have limited stock in the warehouse,” a German buyer voiced as an argument against a possibly buying spree in the next couple of months.
Managers from service centres and processors at Blechexpo stated in unison that, unlike in pre-Covid times, the fair will shed little light on next year’s contracts. Some even denied that initial talks are taking place. “It is much too early for that,” the managing director of a cold-roller said, pointing at the confluence of unpredictable elements this autumn.
Buyers’ eyes are therefore still more on the spot market, where mills are trying to maintain the mark of €700/tonne ($701) for hot rolled coil. “Maybe €680, but for less we cannot cover our costs,” one mill source let on.
But the Dutch buyer will not feed the mills’ hopes. “They are making losses already, and when you are serious about a deal, you will get it for €650,” he concluded.
Christian Koehl Germany
