Established relationships restrain sections imports into EU
Occasional offers of sections from overseas to the EU have a hard time prevailing against established relationships between mills and domestic buyers, according to an experienced market observer.
A “loyalty bonus” affirms the relationship between buyers and their domestic supplier mills. At the end of a calendar year, distributors are rewarded with a retroactive refund or credit of normally €5 ($5.50)/tonne of the volume ordered throughout the year, he explains to Kallanish.
However, if a buyer decides to call up less tonnage than envisaged at the beginning of the year, that bonus expires altogether. “So, if you decide to go for a good offer from elsewhere at the end of the year, and take less from your original supplier, you will lose the bonus for the full year,” he explains. For example, if one buyer calls up only 25,000 tonnes, rather than the 30,000t agreed earlier, he will lose a total bonus of €125,000.
This keeps many buyers away from considering imports, the observer notes, and he does so in view of current offers from China at €700/t ($780) delivered Germany. “This is a good 10% cheaper than from EU mills,” whose current prices are at €760-790/t, depending on category.
Still, German buyers will rarely go for those offers, even if they appear attractive at first sight. “But what they do, they will use them [import offers] in negotiation with their traditional mills in Saxony-Anhalt and Thuringia,” he notes.
Christian Koehl Germany
EU medium sections prices rise on higher offers
The domestic European prices for medium sections rose slightly in the week ended Aug. 14, as some mills pushed offers higher just as the holiday season is ending across most European countries.
“Mills announced increases,” a distributor source said. “The increase is mainly due to higher energy costs in light of heightened geopolitical tensions.”
Sources also noted that whether the price increases are accepted by buyers remains to be seen. Demand remains low, and market participants are negotiating to get better prices, sources said.
Platts assessed the price of European medium sections at Eur770/mt delivered Benelux, up Eur10/mt on the week.
A deal for 1,000 mt was reported at Eur780/mt delivered Benelux.
Offers for a few hundred mt were reported at Eur780/mt delivered Benelux, while tradable values were reported at Eur765-770/mt delivered Benelux.
Meanwhile, Platts assessed the price of Northwest European rebar stable on the week at Eur615/mt ex-works.
A deal for 500mt was reported at Eur610-615/mt ex-works Benelux.
Devbrat Saha
EU long steel market remains mostly steady even as mills announce price increase
The Northwest European market for rebar and medium sections remained mostly steady in the week ended July 10 even as some mills raised offers . Some sources said that demand has improved and is expected to be better in the summer.
“Demand has improved,” another distributor source said. “Some companies will continue in summer and demand is expected to be better this summer. Mills have announced an increase of 10 euros for beams and merchant bars.”
Whether the higher offers will be accepted by buyers remains to be seen, sources said.
“Market is quiet due to summer holidays,” another distributor source said. “There is not much action, and no buying at the moment.”
Platts assessed the price of Northwest European rebar stable on the week at Eur615/mt ex-works.
Tradable values were heard at Eur615/mt ex-works Benelux.
Meanwhile, Platts assessed the price of European medium sections stable on the week at Eur750/mt delivered Benelux.
Workable levels were reported at Eur740-770/mt delivered Benelux.
Devbrat Saha
Italian merchant bar, sections prices tick up
Sources report that Italian merchant bar prices are showing a slight increase after steelmakers implemented a €30/tonne ($34) rise for July, Kallanish notes.
According to multiple buyers and sellers, the market continues to be sluggish. Despite a few increases in contract prices, sales volumes remain low. Merchant bar values currently range from €290-310/t base ex-works or delivered, with slight variations depending on the contract. However, material from other EU countries is priced slightly lower, at around €20/t less. With the inclusion of size extras, prices are currently fluctuating at around €700-730/t.
Section producers have also decided to raise prices by €20/t for July contracts. Beams are in demand compared to other long products, and supply is limited. According to sources, prices for the first category are expected to be at around €770-790/t delivered, which includes a €20/t increase. Some sellers agree this price is effective, but it needs to be consolidated.
Merchant bar and section producers are extending their summer shutdowns this year. Certain facilities are currently idle, while others will temporarily halt operations for approximately 5 weeks before resuming production in early September. Despite July’s dismal market start, there appears to be considerable demand for section sales because of the low stock levels across the value chain and low supply due to stoppages.
Natalia Capra France