The seasonal slowdown of business in the summer months this year should be less pronounced than in “…normal” years, given that business is already slowed down massively. Some observers have raised the possibility that summer may even bring a revival of activity.
One German trader of coil products suggests exactly this. “Some say that summer could compensate for the lack of activity we have had over the last months,” he tells Kallanish. Another German source, a buyer of a processor company, is sceptical, however. “The expectations are diverging wildly, everyone believes something different,” he says. “But honestly, I do not believe in a summer of business, I simply do not see activities increasing much.”
A service centre manager from the Netherlands has observed that June did bring noticeably more business than April and May. But he refrains from predicting that this will sustain throughout July and August.
He also observes the gap between hot rolled coil prices in Italy and north-western Europe is narrow at present, with some €400/tonne ($454) ex-works fetched in the north and nearly €390 reached in Italy. This could be an argument for some more hikes in the north. But then, as Kallanish suggested last week, July business in Italy has quickly slowed down after a good start. Conversely, a too small gap could lead to another softening of prices in Italy.