STEEL NEWS

EU Steel Coil Market Expects First Quarter Price Increase Due to Low Supply

The EU steel coil market was expected to see higher prices in early 2021, with factories in the EU selling off orders through the second quarter and delivery times to May, industry sources said, Platts reported.

Hot rolled coil, cold rolled coil and hot dip galvanized products have become difficult to obtain, and buyers who once relied heavily on imported materials are now looking for orders from local sellers.

“Customers just keep an eye on whatever [price] is available. There is a lot of interest from people who [usually] don't buy from us or who haven't bought from us for years, ”said one European source at the plant. "They hope we can help them."

While Indian players offered hot-rolled coil at € 685 per tonne ($ 840) at CIF Italy ports and cold-rolled coil at € 780 per tonne CIF in Antwerp, long delivery times and the European Commission's anti-dumping investigation against Turkey led to the fact that cautious buyers did not dare to take foreign material.

Hot coil spot prices were expected to be around € 700 per tonne by the middle of the first quarter, although hot coil prices hit a nine-year high with ArcelorMittal's increased supply in December.

Plants pushed for deals ahead of the year-end hiatus to capitalize on the forward pricing impulse, sources said, with plant side players facing high demand from customers looking to order materials at prevailing prices.

While price increases were expected, “if we reach € 700- € 800 per tonne from the plant in Italy, I believe Koreans, Taiwanese, Vietnamese and Turks may consider returning to Europe,” said the Italian trader. "It would be very risky for European factories to keep raising prices."

In the Italian market, a source at the service center said it was unable to meet previously agreed volumes due to shortages. “We talk to customers and say that in the first quarter we will only be able to sell you 90% of the agreed volume because the situation is emergency.”

A source at a German service center said the restocking phase, which began in the fourth quarter, could eventually lead to oversupply. "We can see the situation with stock overstocking after the first quarter ... we will see pressure from the second quarter," the source said. "Volumes [will arrive] in the supply chain in the coming months."

Other market participants said that rising prices for scrap, iron ore and coking coal will prevent price adjustments in the first half of 2021.

“There will be no situation on the market that would reduce prices in the second quarter. It all depends on additional capacity, delivery time and import resumption, ”said the Italian trader.