While sections prices keep showing improvement in European countries, Germany is not seeing the same momentum, observers tell Kallanish.
“Industries in the countries around us are quite busy, but we are not,” says one manager of a distribution company, who complains about a prevailing low in tenders for construction projects, for example.
Distributors have become aware that Germany’s sections mills are quite well utilised, while they are not. End user demand in Germany remains low, and orders for new rollings are coming in from neighbouring countries.
According to one observer, new orders are being accepted for rollings from July. Meanwhile, distributors are competing fiercely to sell the material they have in stock.
“The mills have an international customer base; we distributors act mainly locally, or nationally. This is why the sun these days shines for the mills, but not for us,” he says.
This also means that the mills have a relative power over pricing which does not translate to the distributors. The gradual increase seen this year allows mills to bag €840/tonne ($989/t) delivered for Category 1 sections.
“They will sure reach €850-860/t for orders June,” one manger believes. Given the separate upward price trend for truck freights, prices could be notably higher for customers without railway connections.
One buyer has heard the next big step announced by the market leader, targeting €900/t for later this summer, which he dismisses as wishful thinking. “They are known for always trying for leaps of €50/t,” which in reality does not work, he says.
Author: Christian Koehl
