A number of northwestern European mills that had left the market last week appear to have returned with new price offers which are valid for one day only.
Numerous mills last week had stopped making offers, “apparently to get an idea for themselves what they could charge next,” one German manger tells Kallanish.
He suggests that the next target for medium sections S235JR category 1 would be €800/tonne ($932) delivered, a mark suggested by other observers as well.
Those expectations have now materialised with several mills opting for a gross offer price of €800/t, which could still be subject to individual discounts, depending on the deal, a buyer of large volumes says.
He notes that offers that are valid for only one day. “We have not bought yet for that price,” he says, seeing it as realistic. If offers are not accepted within a day, chances are that the next price is higher, he believes.
While this applies to northwestern European mills, he notes that cheaper deals can still be struck with Spanish or Polish mills, at around €770/t. But he also observes a firm determination of the northern mills to assert the new price level.
Another German manager confirms the assessment, and points at the psychological element that goes with such announcements.
He notes that if offer levels must be firm if starting at €800/t. “If they sink back in the €700s, the effort may go up in smoke.”
Meanwhile, ArcelorMittal and British Steel have sent official announcements to their customers in the UK, with hikes of £50/t ($67/t) and £60/t, respectively. This is roughly in line with the increase reported by Continental sources, of €50-70/t, depending on the previous levels.
