Most hot strip mills in northwestern Europe have been heard lifting their price offers last week, but buyers do not expect the hikes to affect the market immediately.
The announcement comes barely one month after the last hike attempt, which was comparably modest at €20/tonne ($21.40), while now the offers heard are between €40 and €60 higher. One Dutch buyer tells Kallanish he was “completely taken by surprise” by the extent of the hike, which seems hardly justified in the current environment of economic reservation.
German sources were less stirred by the announcement, an attitude attributable to the proximity and awareness of the big coil trade fair this week, the Blechexpo in Stuttgart. “That’s [coil price hikes] typical gunslinging in the run-up to the fair,” a buyer of an automotive supplier says. All other German sources agree.
The annual German sheet fairs in November are normally a platform to start negotiations for annual contracts with big OEMs. “In the run-up to the fair, mills want a strong price base for annual contracts, so they lift their spot market price, although they are two different things,” a service centre manager explains.
“It is a very blatant move,” a buyer of a trader company finds. He sees the hike attempts at around €60/t, while another manager even hears of €70+. “They are aiming towards the €700 ($749) mark for hot rolled coil,” he says. But then he states there is little reason to believe that upcoming transactions will occur at much higher than the €620-630/t that was valid before.
Christian Koehl Germany
