European steel coil demand is expected to subside as the market enters the slow summer period, sources told S&P Global Platts.
While maintaining an overall view for higher prices to be achieved, a Benelux-based stockholder said this would now likely happen after the summer holiday period in northern Europe.
“I am expecting prices to tick up and down Eur2-3/mt only over the coming weeks, overall the view is for higher prices but this will not be until after the summer holiday,” he said.
“The fear of a second wave is rising in Belgium, the Netherlands and Germany as people will gather together while on holiday,” the source said, adding that increased reports of localized outbreaks and potential lockdowns would continue to be a risk to market recovery in August.
Demand from industrial customers for black steel and coated products at the start of July was slower than expected but has been increasing in recent days, though August seasonality would see demand ease back, the source said.
“When competitors drop prices we do not follow them, we have heard some trying to sell materials to support their cash flow needs, it is not good for August but it is the same each August.”
A Northern European mill source remained hopeful of higher prices being gradually achieved each week ahead of the summer holiday period.
“We are quoting the offer but business is being done Eur10/mt lower. However, we hope for another Eur5/mt this week and again next week,” he said, adding that import offers had ticked lower due to currency movements. Hot-rolled coil was heard at $440/mt CIF Antwerp, depending on exchange rates.
The Italian market was relatively stable, according to one Italian service center source, who said any increase in prices for hot-rolled coil would be gradual.
“Offers from imports are totally missing, the European market is completely dominated by domestic mills. Orders are being confirmed for October delivery, but even though order books are getting better, we should not expect a huge increase in the southern price,” the source said.
The same source added that Italian steel suppliers have a “more aggressive” mentality when asking for higher prices, and that this has become even more apparent since imports began to decline into the region.
“Imports are missing, therefore its much easier for European suppliers to increase prices,” he said.
In the automotive industry, the service center source added that there were some improvements, with some car manufacturers inquiring for orders.
— Amanda Flint, Len Griffin