Northwest European coil market enters standoff

Following some buying activity in the wake of price increases, the northwest European coil market has seemingly re-entered a period of reservation, with transaction activity slowing. Observers’ views diverge, however, on whether the reservation is more on the side of the mills or their customers.

ArcelorMittal’s January announcement of a base price for hot rolled coil at €760/tonne ($843), cold rolled coil at €860/t and galvanized coil at €880/t will not be the last word, a Dutch manager believes. “New price increases cannot be ruled out again soon,” he says.

A German buyer forecasts the mills will charge €780/t for HRC as soon as they return to the market – which they have left for the time being. “A colleague heard from a mill that he’d have to wait two weeks before it will again accept orders – and give out prices,” he tells Kallanish, stating that order books are full for the first quarter. Both the German and Dutch sources see the major mills following the market leader in this regard.

An alternative view comes from a buyer at a German processor, who is sure the current standstill comes from the decision of buyers not to place orders. He is also sure that €760/t “is too high, nobody will pay that”, and claims that tonnages can still be had for delivery in Q1.

The next two weeks should bring some clarity once mills return to offering, potentially but not necessarily at even higher prices.

Christian Koehl Germany