EU Coil Buyers Wonder If Uptrend Can Be Sustained

Europe: Prices for coils in northwestern Europe have been on the rise recently, but some are questioning whether the trend can be sustained.

ArcelorMittal recently announced their Hot rolled coil price of €820/tonne ($877), and this announcement has been followed by similar announcements from other mills. There is an argument for mid-term stability due to an increase in prices for imports from Asia and long delivery times up to 4-5 months.

Prices in Europe could be at risk of a downward trend in the spring due to increased imports from India. Recent low prices until December may have encouraged orders, but if buyers in Europe remain usure due to real demand being sluggish, it is likely that stockists of the additional material will reduce prices to shift volumes, creating a potential downside for prices.

The resurgence of blast furnaces is another factor. The mills have been unable to keep up with demand due to being at half capacity, but that should soon be remedied as four mills - including Gijon - have brought their blast furnaces back online since January, with more material becoming available in the market shortly.

The recent earthquake in Turkey/Syria has caused massive destruction and devastation, with repercussions felt far beyond the geographical boundaries it initially struck. In particular, the damage to roads leading to Turkish mills and Iskenderun port means that customers are having to look elsewhere for materials they would normally obtain from this region. This disruption in supply has led many northwest European mills to take advantage of the situation by implementing price hikes.