Lead times for HRC have been shortening in recent weeks

“Buying patterns are changing in the market … people are reluctant to purchase [but] the mills are slow in starting to accept reality with lower prices and shorter lead times,” a west European distribution center source told Platts this week adding that he believed Eur490/mt was possible for larger volume transactions.

Lead times for hot-rolled coil have been shortening in recent weeks with some mills reported to now be offering four weeks delivery ex-works Ruhr basis and five-to-six weeks in cold-rolled — indicative of lighter order books from the European mills.

A Netherlands-based service center manager said he saw tradable value around Eur490/mt in HRC adding “the mills have been saying they are well booked but this is not the case … now it’s a question of who gets nervous first?” The service center manager said however he did not see an prolonged move lower from current levels due to increasing raw materials costs.

The Platts Iron Ore IODEX 62% CFR North China index was set Monday at $95.55/mt its highest level since trading at $94.70/mt on February 8 in the wake of the Vale Brumadinho dam disaster.

A French service center manager said “We all hoped for higher prices in the second quarter of the year but this has not happened and we are now almost booking for summer deliveries – the mills have limited possibilities.” He added that he was seeing tradable value in HRC at Eur500/mt ex-works Ruhr.

A German distributor said further declining automotive demand has been weighing on prices. “The autos have not been taking their agreement call-off volumes each month so there is extra metal to sell,” he said, adding that they saw tradable value at Eur495/mt in HRC and as low as Eur580/mt in CRC, both basis ex-works Ruhr.

A central European mill source confirmed they were also seeing declining demand with tradable value for HRC seen between Eur495 and Eur500/mt ex-works Ruhr.

An east European mill source said, ”there is no demand … people who bought in February and March in fear of higher prices no longer need to buy – if any mills can bring forward scheduled maintenance now is a good time.”

— Len Griffin