As seen in the European steel market over the past three weeks, the veritable chaos has shaken some customary relationships between product groups. This is especially true for hot-dip galvanized (HDG) coil, which was recently offered at a massive €2,500/tonne ($2,717) by one mill.
Yet the recent production stoppages at carmakers have made it difficult to reconcile this with commonly agreed supply and demand figures. The main problem is procuring wire harnesses for cars, produced largely in Ukraine.
“I think mills are taking advantage of panic reactions,” the manager explains. Some projects cannot wait and will pay almost any price to procure steel; however, few actual transactions occur at such peak prices, he believes. A similar effect was heard in the plate market, with some offers in Europe leaping to €2,000/t last week.
Meanwhile, the widened premium for pickled over HRC base prices does not seem to play much of a role anymore. By February this premium had gone up to €50/t, from the traditional €20-30. Both Benelux companies that offer independent pickling services were heard as fully booked. However, one source points out that “they receive a lot of material from Russian mills. So, if those supplies are blocked now, this may again release capacities for regional customers”.
The materials and information on this article have been prepared or assembled by Viet Nam Steel and are intended for informational purposes only.
