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Northern European coil prices still weak, CRC may go lower - 26 October 2011

Northern European coil prices remain under pressure with buyers existing hand-to-mouth and traders liquidating positions to downsize their exposure, market sources tell Steel Business Briefing.

Local producers are offering spot hot rolled coil at around €500-510/tonne ($695-709/t) ex-works. However, traders insist outsell prices from some mill-tied distributors equate to mill prices of €480/t base ex-works. Southern European mills are active in the region at around €480/t del base, one producer admits, and traders have sold quayside material below €500/t FOT.

Pickled and oiled HR sheet has been sold as low as €610/t delivered to customer, a Belgium-based trader adds.

With the exchange rate “improving” for traders, third-country prices are becoming more competitive. Material from Russia, Egypt and other destinations is being offered between €500-515/t effective cfr for end-December arrival. Ukrainian material is below this level, but is not suitable for all buyers, SBB hears. Chinese material is also becoming more competitive in terms of price, though long lead times and the “boron issue” are factors.

Local cold reduced coil is being offered at around €560-570/t ex-works base for December delivery. At the same time, import offers are pegged at €570/t effective cfr for November delivery. Prices could fall further in Q1, another producer source suggests: he alludes to a new base price of €550/t for the period.

Some domestic mills are offering galvanised at €560/t base ex-works, while parcels of Chinese origin material, comprising thin and thick gauges, are being offered at €620-630/t effective cfr for November-December delivery, one trader says.

Coil buyers are still hesitant and are only buying small quantities in anticipation of further price falls, sources concur.


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