Northwest European mills seek role in suspended market

Several larger EU coil producers stopped accepting orders in late April and early May, hoping that prices would remain stable and using this strategy to create scarcity, Kallanish hears from market players.

The mills are expected to return to the market during May or early June, but there is no guarantee the market will be waiting for them. Buyers remain reserved and are being distracted by extremely cheap imports.

“That restrained policy [by EU mills] of only offering limited quantities seems to be missing its mark this time,” one Dutch manager says. He notes the technical problems at ArcelorMittal will soon be resolved, earlier than expected, as will reportedly those at Tata Steel IJmuiden. This should change the supply level in the market quite a bit.

EU mills have lately confined themselves to high-quality grade, with delivery times of around 8-10 weeks. New orders placed in late May/early June would have delivery times in September or later, players say. The question is if the wave of imports is really confined to the usual commodity grades, or will bring speciality grades, too. An Italian manager points at automotive grades coming from South Korea or China, which he expects to increase, with delivery not much later than in September.

Obvious to everyone is the reservation of buyers. “Many customers have halved their stocks, and returned to fixed back-to-back contracts,” a manager at a German stockholder says, using a term that seems to be popping up more frequently in recent times.

The Italian manager notes that shipments at Italian service centres in March were at their lowest since 2018, possibly with the exception of the Covid year of 2020. He adds that “rumours see a clear downtrend for spot deals.”

Christian Koehl Germany