ArcelorMittal’s recent increase in coil prices in Europe is creating uncertainty in the Spanish flat steel market. Distributors and re-rollers doubt the price recovery will sustain, expressing concern that end users will find it difficult to absorb the new, higher values.
“Most market players remain highly sceptical about an improvement in hot rolled coil consumption in the short term, and this increase has come as something of a surprise,” one seller tells Kallanish. “The increase is reasonable from the point of view of the mills because of their higher costs. However, new prices are difficult to bear for consumers, whose purchasing power is not improving.”
According to sources, some Spanish steel producers have already started to adjust their production in the face of falling orders in recent months. Stainless steelmaker Acerinox, for example, has implemented a temporary lay-off plan (see separate article).
“We see no improvement in demand so far this quarter or for the year as a whole. Spanish market confidence is at the low end, as doubts persist in most industrial sectors and investments seem to be slowing down,” one supplier observes.
Spanish mills are currently selling S235JR grade HRC at some €590-600/tonne ($644.3-655.2) ex-works base, up €60/t from last week’s average level in Europe of €530-540/t base ex-works.
Todor Kirkov Bulgaria