Despite moderate demand from European steel consumers, an attempt was made to significantly raise prices ahead of Euroblech, which took place in Hanover last week.
The market leader raised its offer for hot-rolled coil by around €60 per tonne ($67/t). German and Scandinavian hot-rolled coil buyers told Kallanish that the new prices appeared on the company’s customer portal and in individual messages to clients.
“It’s a pre-show attempt; that’s not unusual,” a Scandinavian buyer said. According to him, actual transaction prices may now exceed €750 per tonne ex-works, but he doubts many buyers are willing to pay more than €800 per tonne.
The increase was not widely announced, and other mills did not follow the initiative. During the exhibition, a representative of one producer put the market price at €740–750 per tonne and did not mention any attempt by his company to raise prices significantly.
A manager at a German service center believes the attempt failed. “It only confuses the market, and there’s no other point to it,” he said.
Nevertheless, many market participants believe mills can expect prices and demand to rise in the long term, although the increase will be slower. Lead times are currently around three months, but according to one mill executive, spare rolling capacity will still be available in December.
Spot prices are currently at least €120 per tonne higher than a year ago. This is attributed mainly to EU measures affecting imports, as well as a substantial increase in costs. According to a mill representative, the production cost of hot-rolled coil has risen by €100 per tonne over the past year, while that of hot-dip galvanized steel has risen by €130. Over the same period, the price of zinc has roughly tripled.
However, these factors are being offset by persistently weak demand and difficulties passing on higher costs to steel consumers. “As the end of the year approaches, many European steel buyers remain cautious about purchasing and prefer to keep inventories low,” said a service center manager from the Netherlands.
Author: Christian Köhl, Germany
