While northwestern European mills are currently pushing to stabilise coil prices in the view of seeing them rebound, hot-dip galvanized coil could see a softening in the longer run due to new capacities coming on stream.
At Salzgitter, a new galvanizing line with a capacity of at least 500,000 tonnes/year is due to start operation this year. A new line of similar size at thyssenkrupp Steel’s Dortmund location was scheduled to be started up last year. The company has not updated on this project recently, but it will in any case bring new volumes to the market in the near future. These come on top of the new galv line launched at ArcelorMittal Florange in 2020, and officially inaugurated last year.
On the other hand, Liberty Group’s well publicised troubles pose questions over the future of its European capacities, mainly its works in Dudelange, and in Flemalle, where it suggested to close down one galv line (see Kallanish passim).
According to a manager of an automotive supplier, lower galv prices can already be seen in the market. Mills are officially maintaining the mark of €1,100/tonne ($1,245) ex-works, and most observers see prices not too far below that. However, the manager claims he has heard of transactions that went down to €1,000.
According to a southern German stockholder’s buyer, the market is very opaque because northwest European mills currently confine their business to their regular clients. “When I inquire at some of them, I do not even get an answer,” he tells Kallanish. He suspects that mills are holding back volumes in the hope of a price surge soon.
One big question mark here is over the return of regular automotive production once the bottleneck of semiconductor chips is resolved. It could mean a sudden hunger for material, which some expect later in the first quarter and others not before the end of Q2. This leaves room for a wide pricing range in the meantime.
Christian Koehl Germany
