Northern European mills are struggling to raise coil prices any higher than they have been for a number of weeks now.
The target prices for hot rolled coil called by the market leader in March, €680/tonne, ($764) has not become standard in deals, let alone the following target given in April at €700/t. “I have not talked to anyone who has paid either price,” a well-connected western German service centre manager tells Kallanish. Like many others, he sees the standard price sitting at €650/t for many weeks now but concedes that smaller lots could well go for €670/t.
According to him, ArcelorMittal is currently fetching the highest prices, closely followed by Tata Steel and thyssenkrupp. “I feel that the upward move has expired a bit,” he adds. This view is shared by a buyer in southern Germany. “Mills built up prices in small slices, but it seems the zenith has been reached, and the mills had better not overdraw their targets,” he notes.
He points at ongoing negotiations for quarterly contracts with some industries, even including automotive. “Carmakers and suppliers tend to go for shorter [contract] periods now,” he observes. As a buyer of cut hot-rolled sheet, he is now paying €740/t. This includes €50 for cutting and €40 for transportation, so matches with the coil price of €650/t. “Maybe some €10-20 more is possible, but that would be the peak,” the southern German buyer continues.
However, the service centre manager notes that summer is around the corner, “and that’s when business slows down anyway”.
Christian Koehl Germany
