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EU coil producers hope for September recovery - 25 July 2012

Major coil suppliers in Europe are reporting the market being slow, due to the summer holidays in most of the continent. Nevertheless a recovery could be seen in early September as stocks in the market remain low and imports are un-competitive due to the weakness of the euro.

Sources in the market confirmed that major suppliers are currently holding firm to their hot rolled coil offer levels, having sold most of their material for August/September rolling already. A source at a Benelux distributor reported all major mills offering at €520/tonne ex-works base, while a source at a major North European supplier confirmed deal made at an average level of €515-530/t ex-works base.

Nevertheless a German service centre source stressed that for big orders discounts are available, with transaction prices possibly down to €495-500/t ex-works base for orders over 5,000 tonnes.

“We can’t say we achieved fully the price increase announced back in June, but we succeeded in stabilising the market and are now holding firm to our levels,” the mill source commented.

Going forward some slight recovery may be seen for Q4 deliveries, but no official announcements have been made yet by producers. It is believed the weakness of the euro has given some opportunities to major mills to export, while also increasing the pressure from the input costs, making it inevitable that some price increase should be announced.

Meanwhile the market continues registering lower offers coming from mills located in South Europe, with latest offer price heard being at €495-500/t DDP southern Germany for HRC. Italy’s Riva could become even more aggressive following the announced intention to restart its hot strip mill in September, as reported. A source in the market said this is “normal” and is not creating big concerns.


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