Posted on 19 Nov 2018
Any intentions by north-western European steel mills of having coil prices recover from the softening seen since summer have by now been largely dismissed. Prices will remain at the current level at best, but many observers polled by Kallanish think that a dip is more likely.
Some buyers do believe that prices will remain steady and claim that mills can still ask €550/tonne ($627/t) ex-works or more. Negative sentiment is on the rise however, with other sources claiming that a transaction can easily be dealt for €10/t less.
According to one trader, downstream customers have adopted a defiant attitude “… that isn’t funny anymore.” Inventories at stockholders and customers are relatively full, and “… customers prefer to wait another two weeks before making a purchase because they assume another dip is likely,” he tells Kallanish.
A service centre manager adds that “… mills are clearly signalling a willingness for concessions that they did not show in summer.” They are now prepared to offer lower prices to secure production volumes. This suggests that utilisation of mill capacities into February is not very clear, as many appear to believe.
For cold-rolled strip, still seen at €620-630/t earlier this month, “… I have had offers lower than that”, the managers says. “We are not facing a crash,” he reassures, “but I think an erosion will continue, albeit at a slow pace.”
