European plate market stable on oversupply, demand uncertainty

Storage of Quard and Quend heavy plates at NLMK Clabecq (NLMK Group)

The European plate market saw prices relatively stable over the week to Oct. 16, with market participants still apprehensive about future pricing developments despite relatively stable demand from end-users, sources told S&P Global Platts.

The weekly Platts TSI index for plate Southern Europe was down Eur5/mt at Eur485/mt EXW S.EU, while the Northern European weekly index slipped Eur2/mt to Eur498/mt EXW Ruhr Oct 16.

A German distributor said they were getting consistent inquiries from end-users daily but noted that mill prices were not workable at the Eur500-510/mt ex-works Ruhr.

“Producers are more open to negotiation on plate – mills are suffering because slab prices are very high. There is still oversupply of material and there are no long lead times so capacity can easily cover demand,” the same source said.

The increase in raw materials – specifically coking coal – has pushed up costs for mills, said a German plate mill source, who added, “the buying mood has not really been felt since the summer’s end – export is quiet or almost dead.”

Despite this, the same source was optimistic about Q4 business, despite having three weeks off due to maintenance.

“In general, it is very quiet, inquiries are cautious but alright, but there are no significant projects,” the mill source lamented.

He hoped to hold onto Eur500/mt ex-works Ruhr for s235 grade material, but said it looked unlikely due to the declining economic situation.

Growing near-term uncertainty around the coronavirus looms, with one Benelux trader saying he saw the market for plate weaker for the moment.

“Structurally, the market is oversupplied anyway – COVID or not – it’s just that every mill is hungry for business and demand is very weak,” the source said.

A second German distributor source said cheap plate imports were arriving into Europe from Ukraine at Eur460-470/mt CIF Antwerp.

The same source added that while capacity usage for plate was good, it was not sufficient to provide mills with a decent order book, so customers have turned desperate.

“High raw material prices are a big problem for re-rollers – I think some plate producers may need to close, especially those who have to cope with high slab costs,” the distribution source said.

In the Italian market things were more optimistic, with one mill source claiming there was a push towards a Eur500/mt price market for plate which was proving achievable and necessary to cover their expenses.

“Eur500/mt ex-works Italy is more or less the real picture. We’ve learned to live with the oversupply, but prices are nearly at Eur500/mt due to the arrival of more expensive slabs – deals closed when prices climbed on the slab side,” the mill source said.

— Amanda Flint, Laura Varriale