The downstream coils market was heard as under higher pressure in comparison to other flat-rolled products Sept. 14, squeezed between low demand and high production costs.
In Northern Europe, cold-rolled coil was down Eur15/mt on week, assessed on the day at Eur845/mt ex-works Ruhr. Hot-dipped galvanized material was stable at Eur890/mt ex-works Ruhr.
Market participants reported prices in a wide range, with most seeing tradable value at around Eur850/mt ex-works Ruhr, but lower prices were considered achievable in comparison to firmer offers on other products such as hot-rolled coil.
The lower end of offers was reported at Eur830/mt ex-works Ruhr, with the high end cited above Eur850/mt for longer-term orders and project-based material.
“CRC and HDG are still under substantial pressure,” a distributor source said. “There are different dynamics at play than in the hot-rolled market. Mills are really struggling for additional orders and will cut discounts for special deals. There aren’t really any target prices — these are problematic products, and we don’t anticipate a healthy rebound as with other flat-rolled material.”
Mixed signals were heard from the automotive sector, with order intake reported as low but increasing. Given the long automotive backlog, expectations were cautiously positive that orders would be maintained going forward.
A second distributor was pessimistic, however, reporting continuing cancellations from the automotive sector, instilling a mixed and case-by-case automotive outlook among sources.
Due to a lack of offers for Q1 2023, forward-looking buyers were heard as turning to import material to cover necessary volumes. An import deal was reported into the Northern market at Eur830/mt CIF ex-South Korea for January arrival, in line with offers heard the previous day at Eur830/mt CIF Antwerp ex-Taiwan.
Energy costs continued to be the primary talking point as relates to downstream products, with production particularly exposed to jumping energy prices, and natural gas prices in particular.
The Italian market — where supply is more strongly represented by EAF route producers or rerollers — has less potential to capture gas from integrated blast furnace production for electricity generation or other related uses, pushing production costs higher in Southern Europe.
As such, despite a lack of demand, downstream coils in South Europe were assessed higher than their North European equivalents, at Eur890/mt and Eur910/mt for cold-rolled and galvanized material, respectively, ex-works Italy.
Platts is part of S&P Global Commodity Insights.
— Benjamin Steven, Maria Tanatar