Jun 22, 2023
EU coil makers will keep output under control

Northwestern European coil mills are keeping their output low given the reservation of buyers, which ultimately may mean idling blast furnaces again. Meanwhile, a gentle rise in prices for imported material could herald a stabilisation of European domestic prices.

On the import side, values seem to have bottomed very recently with what a Dutch manager calls a “test price increase”. “We heard some of our sources say that some Asian mills stopped the negotiations and already withdraw some of their offers,” he tells Kallanish. Similar signals are being heard from southern Europe, with offer prices picking up gently.

Some say imports of cold-rolled material have been higher than usual in recent months and have left their mark on domestic prices. According to a Benelux buyer, the price spread between hot rolled and cold rolled coil from EU mills was temporarily only €50/tonne ($55) or less.

Views divert on this aspect. German observers claim the spread is €80+, as usual. Two opposing factors collide here: the influence of imports and the long-term outage that occurred at a Tata Ijmuiden CR mill, which should have pushed CR prices up. Quite possibly, that outage was a signal to exporting countries to fill that gap with increased tonnages of CRC. Ijmuiden’s facility is currently returning to operation, and the impact of that on the market remains to be seen.

Buyers see prices for HRC softening to around €700/t, and even lower, ranging from €670 to €720. The range seen for CRC goes from €760 to €800+. Hot-dip galvanized strip has so far been holding at or above €800 in Germany, the Benelux and Austria.

According to the Dutch manager, it is likely that mills will use the holiday period for extended maintenance, in order to create a shortage or at least a better balance between supply and demand. He does not even exclude the possibility of blast furnace closures. This would mean a return to the status of last autumn, which was followed by a restart in spring at a time of low consumption and low-priced imports.

Christian Koehl Germany

Source: Eurometal