The Northwestern European rolled products market participants would welcome a price increase, but most of them are skeptical that ArcelorMittal's latest price hike announcement will lead to a market revival.
The company is currently asking for 590 euros per ton ($694) for hot delivery. the rolled-up roll that the company announced to the market earlier this week (see Kallanish passim). According to the manager of the German service center, the company's previous base offer was 560 euros per ton, and, according to him, it may remain in force if the increase cannot be consolidated.
He points to a fairly large price gap between the plants, some of which offer well below 550 euros per ton.some enterprises, while others preferred to reduce production in the summer, instead of contributing to lower prices. Another source at the plant, who mostly has long-term contracts, confirms that "we have little interest[in the spot market]in such low levels."
As for the general mood in the market, most buyers say they do not see a recovery in demand, although they hope for it, and they believe that factories are giving out unjustified wishful thinking. According to one Scandinavian wholesaler, "I have indeed heard about the increase in demand and prices after the holidays, but no one says why this should be the case."
A trader from Switzerland agrees with him, stating that "consumer demand is really bad. And the light is not visible." The Dutch buyer also sees a silver lining, given that "demand continues to decline, although factories have already limited production."
The factories have some grounds for moderate optimism. A source at ArcelorMittal points to lower interest rates that will promote the development of construction activities, as well as EU import guarantees that will be "radical" and effective. "There will be positive results, it's only a matter of time," the source adds.
These words were mostly repeated by SSAB CEO Johnny Shestrem during the company's earnings report this week. He referred to numerous initiatives in Europe – guarantees, CBAM, interest rates, national incentives, action plans – which, in his opinion, will bear fruit. "When the market returns, it can happen quickly," he said.
The Swiss trader claims the opposite. "It's incredible how much prices have decreased[since May], despite all these measures and plans," he notes. An analyst at a German bank warns that "metallurgists should "stick to the rules of the game" in their own interests," but also believes that "the perceived reality" is not so rosy.
Christian Kel Germany
