Although some European coil mills have started trying to bring prices up from the low reached in summer, this may be harder to assert for cold rolled and galvanized than for hot rolled coil.
Apart from the obvious reservation on the demand side, domestic integrated mills are under pressure also from imports and from high energy costs. The price of HRC, despite efforts by northwest European mills to charge more, is basically sitting at around €650/tonne ($696). Traditionally, a premium of €80/t used to be common for CRC, and of around €100/t for HDG
A mill manager points out the structural problem of high energy prices in many European countries, which make additional processes more costly than before. He tells Kallanish that the traditional €80/100 premium is actually not sufficient to cover those extra costs. “We try at least to keep that premium up,” he says, but suggests the surcharge would actually have to shrink to attract buyers. “We’d be better off selling plain HRC,” he opines. Competition is especially hard against imports from countries with lower energy costs, he adds.
For a while in June/July, downstream, “there was no [premium] relation at all, people just tried to get their material sold”, a buyer at a distributor states. He says this is still the case, especially for service centres, “which are still selling off material at their intake price, sometimes less”. While this may be temporary, it does not help to stabilise prices in the medium term, he warns.
Christian Koehl Germany
