Blechexpo: Coil cost will rise, but downstream consumption will be weak
The demand for rolled metal in Europe remains low, and the main buyers continue to take a wait-and-see attitude, which was confirmed by steel refiners at the Blechexpo exhibition in Stuttgart on Wednesday, attended by Kallanish.
Both producers and processors noted that their market indices lag behind current values, and the previously available base level of hot-rolled roll supplies of 580 euros per ton (678 US dollars per ton) is no longer achievable. "Buyers have been buying very little lately, so prices were clearly unaffordable," commented one of the steel refiners. Sources say that the current prices for HRC are about 600 euros per ton with basic delivery, while some volumes are slightly lower.
However, trade activity remains limited, and European ports are currently receiving material purchased in Asia during the summer. In anticipation of CBAM and new protective measures, several buyers confirm that they have managed to purchase significant shipments on the import market for delivery before the end of the year. Many have decided to build stocks to limit the risk of higher European prices.
Currently, European manufacturers are seeing a recovery in prices, although the growth remains gradual and is based on sales in relatively small volumes. In order for volumes to recover, "they[mills]will have to keep[prices]at the same level for at least another month," another steel processor comments.
Prices are rising, and the overall mood at the exhibition was positive. Steel processors, including service centers and distributors, have confirmed that prices for metal derivatives are rising. However, forecasts point to a slower recovery than manufacturers would like. While some steel companies are refraining from offering to supply in the first quarter, others are offering HRC at a price of about 650 euros per tonne delivered in January.
According to several steel refiners, this level is "overly ambitious" compared to prices for sheet, strip and pipes, which are expected to continue to rise, but moderately. The "gradual" and "moderate" nature of the recovery reflects the reality that demand in the secondary market is not contributing to the current price increases and is likely to remain low in the coming months.
CBAM and the new protective measure are causing significant confusion in the market. Numerous sources called this a "mess," noting that the estimated cost of CBAM could range from 20 to 200 euros per ton.
The international trading company reported that it has shifted its focus from conventional products to niche materials with high added value. The larger trader, however, acknowledged that abandoning the traditional