European flat steel price trajectory remains uncertain

The trajectory of European flat steel prices remains uncertain as steelmakers are hoping to raise offers from the levels seen since July, but sentiment in the market continues to be weak.

During a webinar held by Siderweb on Tuesday, the direction of the market was debated by the likes of Cesare Viganò, head of ArcelorMittal CLN, and Nicola Cavazzoni, sales manager for plate at Marcegaglia.

The panellists agreed suppliers have the clear intention of lifting flats prices in the market, as a consequence of higher-than-expected raw material and energy prices. At current transaction levels, Viganò sees European steelmakers being very close to their breakeven levels – a maximum of €50/tonne ($54) away. Cavazzoni meanwhile believes the bottom has been reached.

Viganò said that real demand remains too low to support restocking in the coil segment. He also sees increasing international uncertainty limiting the likelihood of price increases. “I don’t see the support of apparent demand at the moment. Even in the automotive sector, we see higher activity compared with the last years, but the market still remains below pre-Covid levels,” Viganò noted.

Cavazzoni was more positive in his view, stressing that current production costs indicate that the floor of the market has already been reached. “We already see some effect on slab prices. The current prices are in many cases unsustainable for steelmakers,” he explained.

“Imagining that prices could drop further for flats in Europe is unrealistic,” Cavazzoni added. “I do not believe they will increase next week, but the trend for the near future points to higher prices for flats due to higher-than-expected input costs for production.”

According to Kallanish indices, hot rolled coil prices in Europe are now close to the bottom reached in the dismal fourth quarter of 2022. Plate prices, on the other hand, are now at the lowest level registered since Q1 2021.

Emanuele Norsa, Italy