Buyers of hot rolled coil in Germany and the Benelux are currently holding back from orders, as inventories are apparently still well-filled, and the direction of prices is somewhat unclear, Kallanish hears from various sources.
"Somewhat unclear" effectively means that prices may remain stable or soften, but buyers do not believe in an increase. “Integrated mills are trying to fly the flag and defend the mark of €550/tonne ($630) for hot rolled coil,” one German managing director says, adding that “…there are offers that are below that.”
A Dutch source says: “I hear that people are not buying because the stocks are high.” This is an observation shared by many Germans. One trader there finds that “…stocks are higher than planned,” so people want to wait easily another two weeks, thinking prices might fall, he says. Sources confirm that €540/t is a realistic deal price, but refrain from suggesting figures below that, or ruling out offers above €550.
“Both sides are lurking and watching,” one service centre manager says. “We are closing in on the negotiations for the first half-year contracts, but we need to wait for the bigger ones to go ahead with some model deals,” he says. There have been reports of the first large contracts closed at around €540, which is essentially the level from the end of last year.
“The question now is: will we get materials cheaper in three weeks from now?” the SSC manager quips.
Source: Kallanish
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