North Europe hot-dip galvanized sheet prices remained relatively stable over the week to Oct. 20 as ambiguity remains rife in the market. There was little change in the automotive demand situation as more mills and distributors face further cancellations from automobile manufacturers, sources told S&P Global Platts.
A European mill source said producers were starting to offer for automotive contracts around Eur1300-1400/mt ex-works Italy, while an Italian trader said a major European carmaker was able to achieve Eur1250/mt for a long-term HDG contract, given the evident decrease seen in spot prices.
“Automotive continues the same, we are getting cancellations one day to another. People are pushing for improving delivery times, now you have to cancel delivery because of cancelled production,” the mill source said.
Recently, distributors and stockholders have been concerned about a sudden increase in demand, with little material to go around.
As more material becomes available due to untaken automotive volumes, however, recent plans for production ramp-ups have come into question.
“The productivity decision was given some months ago before summer, so it’s delayed,” the mill source said. “I don’t know what the reality will be. Volatility is huge – energy costs and the supply chain are so under pressure.”
Import pressure continues to add to the ambiguity on HDG prices, as well as the nascent presence of gas and carbon surcharges from mills, which have become huge talking points around the long-term viability of prices.
A second Italian trader said as of Oct. 18, Russian producers have used 50% of their quota balance, with Turkey extremely close to exhausting its own allocation for Q4, and India’s quota balance also filled.
— Amanda Flint, Laura Varriale
