European coil producers consider increasing prices

European coil producers are mulling increases. Market sources tell Kallanish some are considering a €20/tonne ($21.4) hike. According to several buyers and sellers, import prices from Asian suppliers are not decreasing anymore and offers are ticking up in some cases to the level of €600/t cfr southern European port.

In Italy, hot rolled coil producers are pushing up prices for new contracts by an average of €20/t and asking for €660-670/t base delivered, depending on volume. Demand has been quiet in all markets this week as several executives are on holiday in European markets due to Labour Day. Next week in France and other European countries, demand is also not expected to resurface owing to the 8 and 9 May bank holidays, as well as the 10 May bridge and school holidays.

Sources at EU producers are aware that consumption remains limited and believe the price uptick will benefit margins in the entire supply chain. A service centre in Italy reports increased demand downstream but at low prices. This is putting strong pressure on margins and causing companies to lose money.

European steelmakers’ lead times are reported at between June and July. At present, HRC prices in Europe are at €630-640/t base ex-works, with the low point of the range seen in southern Europe.

Import prices are hovering at around €600/t cfr northern and southern European ports, or slightly below depending on volume and quality. Some producers in countries such as India and South Korea are not quoting HRC for Europe. Buyers are lamenting the long lead times. Turkey seems to be the most attractive supplier at present in terms of delivery time and prices, but quality issues are being reported. Turkish producers are offering material at €610-620/t cfr Italy duty paid.

Producers in the EU are slowing output, but no stoppages are officially planned. According to a source, the only way to address the issue of tight margins and stalled prices throughout the value chain is to cut output.

Natalia Capra France