The European hot-rolled coil market was described as in a transitional stage Nov. 30, as market participants expect price increases on flat products in the near term.
Both the North and South European markets described accelerated demand this week, with depleting distributor inventories motivating first-quarter purchasing.
“I’m hearing generally that service centers are reaching their bare minimums and so are looking to build stock,” said a North European distributor. “Offer prices are up very slightly and many see the floor, so I think we’ll see some buying at these levels followed by price hikes next week.”
Mill sources confirmed the sentiment, with some withdrawing from the market to assesses willingness to pay higher prices from next week.
“We’ve sold the last of our volumes at the current price level of Eur600-610/mt ex-works,” said a mill source. “At the moment we aren’t offering until next week as we’re expecting a price increase.”
While some perceived opportunity to secure volumes at the previously reduced price level, even below Eur600/mt ex-works North and South Europe, the most competitive of offers were generally accepted as withdrawn from the market.
“The market is in a transitional period,” said a German distributor. “I’m hearing that in some cases mills are taking back old offers and withholding new offerings, and there’s definitely resistance to the lower levels now.”
A Northern mill source confirmed expectations of an uptrend given recent stock clearance from steelmakers and provided some clarity on lower prices heard in the market.
“In general, I think we’ll see increases from next week, but its always possible to see some stupid prices left over,” said a Northern mill source. “Some are still in stock clearance, and some must continue to produce as otherwise they’ll lose ETF rights, so in some cases the arguments to sell lower are still there.”
Platts assessed hot-rolled coil in both North and South Europe stable, at Eur610/mt ex-works Ruhr and Italy.
Platts is part of S&P Global Commodity Insights.
— Benjamin Steven