Managers at large coil purchasing companies in Germany and Austria were taken by surprise on Wednesday by ArcelorMittal’s hot rolled coil price hike in Europe to €590/tonne ($652) ex-works.
“Only today, I received an effective-price offer from ArcelorMittal, but when I re-calculate it, it is certainly lower than that [€590],” one Austrian source told Kallanish on Wednesday. He could not give a comparable base price, as the offer concerned a special specification, but notes it would not be in line with the new price hike.
“The latest move, from last week to this, was down a bit further,” says one unawares German service centre manager, assessing the latest offer at slightly below €550/t ex-works.
Another manager doubts that mills’ production capacities for the fourth quarter are already filled enough to justify such a move. “There must be some other background to it,” he says, suggesting that mills might try to flex their muscles in advance of the upcoming Euroblech fair.
“And anyway, who would pay that [€590]?” the Austrian source wonders, in view of continued sluggish demand in Europe. His latest order from a western European mill last week was at €580/t delivered, which would translate to €530/t ex-works, close to the low point of the latest cycle heard by other sources.
One well-connected observer does however confirm he heard of the new offer, and that ArcelorMittal would not book any additional volumes at previous, lower prices. “It’s not official, really, because they have failed to exert it often enough in the past,” he says, but he notes that mills do have a point, as competition from Asia is waning somewhat.
Sources reported on Wednesday that ArcelorMittal is raising coil offers in Europe, with immediate effect (see separate story).
Christian Koehl Germany
