ArcelorMittal’s recent coil price hikes in quick succession have not yet reflected in market transactions, which is not surprising given the long-term weakness in demand and the current summer holiday slowdown, market sources tell Kallanish.
In two steps, ArcelorMittal customers were informed of new prices for hot rolled coil first of €580/tonne ($678) delivered, followed this week by the new target of €610/t. Both hike announcements were confirmed by the company upon inquiry, and other mills may be about to follow.
Amid the slow pace of business during August holidays, market players have seen little evidence so far of prices being paid above July lows of below €550/t ex-works.
“I have not seen any higher prices paid yet,” a Scandinavian buyer says. He refers to the latest price point at €600/t delivered from western European mills, which suggests an ex-works price of €550 plus the higher transport costs to Scandinavia. “Most mills are raising prices, but not selling,” he observes.
Sources in Germany and Switzerland believe that other mills have followed or will follow the market leader’s move. “It is pushing prices up before summer closure, but with little market effect,” one trader says. A Benelux-based source hears that one mill is still accepting orders at the old prices, despite announcing higher prices as of August.
The trader notes that “there is little expectation for demand to recover, as we all know.” Nevertheless, he adds the push for higher prices is there, especially for small quantities. He does not expect to sell larger volumes, but will demand higher prices from buyers.
A buyer at a re-roller concurs that “all my sources at mills take for granted that prices will go up in the second half.” The uncertainty over booking imports with CBAM looming will spur inland bookings, and hence push up spot prices. “If push comes to shove, some players will reduce capacities to support a rebound,” he concludes.
Christian Koehl Germany
