German coil market sees some bottlenecks

Coil buyers in Germany say they have experienced some shortages in recent months. These were nevertheless confined to local suppliers serving high-standard applications and may not have been widely heard in the overall sluggish commodity market.

One player is SSC Becker, Germany’s largest service centre, which has been suffering from hurdles launching the new ERP (enterprise resource system) it introduced in spring. “This has influenced our deliveries, which we regret very much. We kept informing our customers in the interest of a trust-based relationship,” the company tells Kallanish.

Meanwhile, a task force of IT, sales and logistics has worked intensely to overcome those issues. Deliveries are now nearing the volumes they saw prior to the ERP launch, Becker says. However, it also mentions shortages it is experiencing as a buyer, due to insufficient delivery performance by its suppliers.

According to another observer, this points to one mill that declared force majeure in June after heavy rains, but was apparently already struggling with meeting targets before that. “They [the mill] thought they could produce at full capacity, which did not work, so they had to turn down orders in order to return to normality,” he says.

Still, this mill’s case of force majeure was justified, unlike that of Tata Ijmuiden, which was declared for technical shortcomings, he claims. He adds that his company is still in negotiations with Tata about the resulting cancelled volumes. “You do have to concede some loss in such cases, but we solved most of it by negotiating,” he says.

Observers also suggest that ArcelorMittal exaggerated the damage resulting from accidents at some of its mills in Europe, taking it as a welcome argument to keep production down amidst a sluggish market.

Christian Koehl Germany