The floor for northwest European coil prices appears to be coming nearer and nearer, but still remains out of clear sight beneath a murky misty layer.
Sources from integrated mills, of course, claim that the bottom is nigh. “From what I see in the press, prices are no longer sinking,” one mill source says, but fails to give evidence. “I do believe that we are very near the bottom of this price spiral now,” another one says, stating that his company is starting to see improved activity in the market for the first quarter.
From the buyer’s side, views are more sceptical. A manager at a German fabricator speaks of “wishful thinking”, but also believes mills tend to further production cuts rather than to further price concessions.
Although signals of a recovery are heard from Italy, these have not even reached Austria yet. According to a buyer in the Alpine nation, prices for hot rolled coil are still at €660/tonne ($678) delivered, with hardly any difference between product from Italian or German mills. In the latter case, deducting delivery, the ex-works price would easily be at €630/t or lower, although official domestic offers tend to be higher. Swiss sources suggest offers from Italy are at €600 ex-works.
Sources in the Benelux tell Kallanish they do not see solid ground yet, citing continued lack of demand and still-too-high stocks at traders and service centres. One service centre manager, however, observes that some bets on a rebound are being taken at the customer end, too. “Some customers think that the lowest price level has now been reached and are actually considering ordering larger volumes at these prices to avoid possible price increases,” he says.
Christian Koehl Germany