Northwest European coil mills keep making price concessions

The price paid for hot rolled coil from northwestern European mills has come down to around €730/tonne ($790) from the level of above €750 reached in early February. There is some doubt that mills can stabilise the softening because real demand does not support mills’ desire to cover their costs, according to market participants.

“Prices were pushed up since the [Blechexpo] trade fair [in November], but the target of €800/t the mills had called for was never achieved,” one German HRC buyer tells Kallanish. He points to the separate playing field of annual contract talks, in which mills largely succeeded in fetching a figure starting with 8. “That helped in overcoming the €600+ price range that prevailed on the spot market into November,” he observes.

Now that the surge in spot prices has stopped, “buyers have smelt blood; they see that the mills’ bookings were sparse in recent weeks,” another observer says. He notes that mills’ costs for slab have eased somewhat, but only by €10-15/t, which is “not enough [to cover] the drop of €40 or so that some are having to concede in their selling prices.”

“Some mills claimed they did get the €800 they targeted, and I even believe them,” he notes. “But I bet that would be for March deliveries to customers with shortages because they banked on imported material that got stuck at customs clearing in Antwerp.”

According to the other buyer, traders have lowered their offers for imported HRC to €649/t cif Antwerp from €700, citing one offer. “That would not be material sitting at the port, but new rollings that would take another 3-4 months to arrive,” he cautions.

Christian Koehl Germany