European buyers of rolled materials may be increasingly inclined to purchase non-primary materials as a result of the ongoing decline in demand, as well as as part of long-term development.
"I see that more and more people are asking about non-primary materials. material" under conditions of prevailing caution, do not overspend on volumes that may become even more devalued, a trader from Benelux tells Callanish. "This, of course, applies only to those applications where the use of non-basic materials is possible," he adds.
Steel Maintenance Centers (SSC) prefer to use primary materials for their processing, but do not exclude the possibility of using secondary materials that are not primary. The German SSC manager notes: "It depends on the goal. If the part is not visible from the outside, many people are satisfied with the 2A ratio[a German secondary-quality steel grading]," he says. Nevertheless, 1A remains the backbone of the company, and customers, as a rule, do not replace one with the other, he adds.
Sometimes factories lower the rating of raw materials to 2A in order to be able to sell them at a lower price without losing their reputation. According to one observer, a system has been in place for this for a long time. For cold-rolled coils, the German classification ranges from the usual DC-01 to DC-05 grade, which is about 40 euros ($47) more expensive per ton
"[The major mill’s]As a rule, products of the DC-03 brand," he explains. "Customers usually order DC-01 from them, because they know that they will receive DC-03, because it is impractical for the plant to adjust production too often. And then buyers from their customers will still be able to certify it as DC-03 and set a higher price accordingly."
This can also play into the hands of buyers from factories. The trader tells the case of one customer who did not ask for certificates and had been buying for years from a large mill group, which was very satisfied because it could use non-core products and sell them at favorable prices. Then the new manager of the purchasing company questioned the correctness of the purchases and began to buy from the trader, not from the factory.
As for the current market prices, the players see minor changes compared to the 570-580 euros per ton in stock (671-682 dollars), which prevailed for the hot-rolled roll for several weeks. The cost of a cold-rolled roll will be 80 euros per ton.
Christian Kel Germany
Kallanish.com
