The Spanish coil market has remained stable for more than one month. Most buyers had ordered what they needed by the end of July. Demand from the major consuming sectors is slowing but the market looks set for a possible recovery in September, Kallanish understands from local service centre sources.
Mills’ S235JR grade hot rolled coil quotes are stable at some €610-620/tonne ($661-672) ex-works base. Some mills are trying to offer material at the higher end of the range, but large service centres are not accepting to pay above €610/t ex-works.
“Demand is low. But not only because of the holiday season. The truth is that some sectors have been underperforming for almost a quarter, such as the automotive sector,” a market participant comments. “Purchasing activity in Spain remains weak. The slow progress of the electrification of the car fleet in Spain has had an impact on the activity of manufacturers, who have also seen their export volumes decrease.”
Another source confirms that the wind energy sector, where consumption of flat steel has been on an upward trend in recent years, is now in a very significant downturn. “We expect a recovery of the [wind energy] sector in September, although we have to be very cautious about how much HRC prices can recover. Consumption is very low and most traders have already reduced their profit margins by some €20/t,” he observes.
According to market analysts, monthly flat steel consumption in Spain now ranges from 250,000-300,000 tonnes.
Todor Kirkov Bulgaria