Nearly sold-out European mills start to allocate volumes without price

Buyers of European steel are finding it increasingly difficult to get their hands on products across the supply chain, with several mills now heard out of the market until next year, and the pool of import offers was drying up as uncertainty built around the outcome of a possible EU import safeguard extension come July, sources told S&P Global Platts.

Mills sold out for Q4 were still in contact with those customers keen for allocations for Q4, with volumes agreed between buyer and seller without a price.

“We keep in contact with the customers. There are inquiries for new projects. We’re changing steel grades but not looking for new business,” a European mill source said. “I can tell customers which quantities we have in our forecast for them. I can give this information, but without a price — customer knows at least what he will be promised.”

Those customers the mill source was unable to accommodate for Q4 were told to look elsewhere for material.

More buyers were heard to be exercising back-to-back buying to mitigate risk as uncertainty around prices mounts

A Benelux buyer said risk was high in the stock business, with the outcome of higher prices imminent.

“I waited for two weeks to buy, and the price is only going up. We don’t expect softening,” the buyer source said.

In the Italian market, a mill source said there was “little visibility” about real mill offers around CRC, and Eur1,100/mt ex-works Italy was deemed an acceptable price for HRC.

On safeguards, by which the European Commission will review whether to extend measures that limit the amount of imports in the EU market, a German trader said it was likely those measures would be extended given the strength of the steel lobby in Europe.

“The pressure from the consumers should be pretty strong, as long as the lack of availability persists from EU mills, which will be the case for the end of the year,” the trader said. “But the steel lobby in Europe should be strong enough to fight for the extension of the safeguards.”

— Amanda Flint