Cold-rolled coil pricing on the European market shows a strength that differs from hot-rolled coil, and, to some extent, from hot-dip galvanized.
Only recently, the market leading mill gave a surprisingly high target price for CRC for new orders, €940/tonne ($1,041), compared with €820 for HRC, and €900 for galv. Managers at distributors had earlier pointed at the relative scarceness of CRC, and that its prices eclipsed those for galv. They argue that CRC is more affected by the EU’s safeguard duties. Also, European integrated mills prefer to go for galvanizing, of both hot-rolled and cold-rolled coils, so that some shortage of CRC is home-made.
The spread of €40 versus HDG is still relatively big. “We are used to them jumping the fence sometimes, if they see the opportunity to cash in on a critical development,” one trader says. But he concedes that cold-rolled is “the hot item at present” in terms of demand, which for HRC is lukewarm at best.
Another observer finds that the new target is not unrealistic, and that other mills have followed suit, with some apparently even citing up to €950. One major difference to the HRC market, is that hikes for CRC can actually be handed down, he says. “Prices for cut sheet can now be in the four-digits,” he tells Kallanish. He notes that material for this year is largely sold out at northwestern as well as at Italian mills.
A source from another mill says his house has not yet really started to quote actively for January. “But we certainly see strengthening market conditions going forward,” and supporting the price hike announced by others. Import quota cuts and AD cases on CRC are leading to a healthier supply and demand balance, he argues. “And that’s what is probably reflected in the ambition to quote CRC coils at +€40/t vs metal coated.”
Author: Christian Koehl Germany
