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Prices for hot and cold rolled coils in Europe have not yet bottomed out and values may continue to fall in June. Some sources in the Northern European flat steel industry believe that the bottom will be reached in July, after scrap prices have reached their lowest levels before the August holidays, with a possible rebound in September.
In the fourth quarter, European and global markets are expected to normalise in terms of balancing supply with demand. The European stainless steel market continues to be sluggish in terms of sales of both coil and its derivatives. Activity is quiet in all countries, with customers ordering only back-to-back or not at all.
The drop in consumption is forcing mills to reduce production to balance supply and demand. Market sentiment remains negative.
According to market sources, coil prices in Europe will lose another 100-200 EUR/tonne compared to current values. Scrap prices will continue to fall in June and July, but the low scrap availability and cuts in coil production will solve the overcapacity problem and generate some material requirements after the holidays.
Buyers will stock up on material until July and then stop for the holidays, while purchases will resume in September, thus favouring the normalisation of scrap and coil prices.
For demand to resume, European prices need to align with coil offers from the Far East, and we are actually approaching Asian levels. End-users have some orders, but the challenge of the moment remains the pessimism and fear pervading the market.
Currently, stainless CRC in Northern Europe is averaging at €2,500/tonne delivered and HRC at around €2,250/tonne delivered. Steel mills indicate delivery times of four to six weeks. According to sources, prices for CRC from the Far East are around EUR 2,350/tonne cf.
Stainless Steel – Asia Area – euro/tonne – Powered by Commodity Evolution
