Kallanish Europe Steel Market Commission expects price increase at the end of the year
Participants in the final round table of the Kallanish Europe Steel Markets, held this week in Vienna, expected steel prices to rise by the end of the year. However, their opinions differed about the degree of growth and which factors would play a decisive role.
The participants in the discussion were unanimous on the impact of EU trade measures on imports, including the Carbon Border Adjustment Mechanism (CBAM), as well as the new tariff quota system, which is due to be introduced from July. The effect won't be felt immediately, but it's likely after the summer holidays, when buyers start thinking about restocking, says Philip Edmonds of M7 Metals. According to his assumptions, by the end of the year, the cost of a hot-rolled roll in Europe may reach 800 euros per ton ($925 per ton).
Alexander Sobol of Salzgitter Mannesmann, in principle, agreed with Edmonds' opinion that buyers would assess their inventory levels in September, but said he was more conservative and expected 750 euros per ton. In particular, he warned that factories could restore the capacity they had reduced, which would undermine efforts to stabilize prices.
This argument was echoed by Kamal Arifi, Director of Commercial Transformation at SSAB Europe. If the European plants resume work in a larger volume than they are now, "we will lose the advantages that we receive from guarantees," he said.
In this regard, Edmonds is more optimistic. "I think EU factories will be disciplined. It is much more profitable for them to receive 100 euros more per ton than to produce another half a million tons," he said.
Emanuele Norza from Siederweb noted another factor: scrap metal prices, which, in his opinion, are too low and do not match steel prices.
"First, we need to see how the number of marriages is increasing. The difference is too big at the moment," Norsa said. According to his estimates, prices for HRC at the end of the year will range from 700 to 750 euros per ton, "but not higher."
Author: Christian Kel
Kallanish.com