EU mills start signing annual coil contracts

Negotiations for long-term coil contracts between Western European mills and their large customers have dragged on relatively long this year, which is not surprising given the exceptional price moves seen last year.

Meanwhile, various deals are finally heard to have been concluded. And, apparently, the year-on-year premium bargained for so intensely has settled at a value of around €500/tonne ($567), at least for hot-dip galvanized coil. Such is the value heard from a deal between a German mill and a tier 1 automotive supplier, with other deals’ premiums apparently landing at between €490 and €520.

“We have been bargaining for a plus of €480-490, but we would make do if we ended at €500,” a buyer of another automotive supplier tells Kallanish. A common basis reached in last year’s talks for HDG was €600-650/t. This would mean that contracts for 2022 are worth €1,100-€1,150/t, meaning on the upper end, or actually above current spot prices.

For 2021 contracts, negotiations were rushed by mills in autumn 2020, as nobody anticipated the price eruption that would later follow.

Christian Koehl Germany