The go-stop-go pattern of plate prices on their way up has brought many northwestern European distributors out of step, and they could be in for dire straits, market observers believe.
Plate prices started their rise with a considerable delay after coil in November and until year-end. The first two months of 2021 saw relative stability before another hefty surge kicked off, which by now has brought commodity grades (S235 as well as S355) to €1,000/tonne ex-works ($1,207/t) and possibly higher.
“The stockholders had waited pretty long. We then had the big hype in late 2020 when they were busy refilling, but then they were just as busy with selling profitably. But they did not expect another price wave, and certainly not the height it would reach,” a manager at a plate mill describes the situation to Kallanish. “Now they are facing elevated prices, very long lead times, their brief profits are being eaten up, and when the market drops at some point, they will be sitting on expensive purchases. This means they must act very cautiously these days.”
A buyer at a big stockholder agrees, noting: “We must be profitable now, to have a cushion when the price falls back down, which could easily mean by €400/t, and that could break the neck of many small enterprises.” Hence, his company has lifted sales in line with mill prices, not only for the sake of profit but also to discourage panic purchases.
Given the supply shortage at mills, which currently don’t take orders or give prices for the fourth quarter, many stockholders have restocking problems, which means a blessing for his company.
“We have a broad range, and we see many new customers come in for grades that they do not get elsewhere at the moment. In normal times, we sell 350-400 tonnes per day; now it is easily 600 to 700,” he says.
Christian Koehl Germany