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European stainless coil market foresees some July restocking

European stainless steel scrap and coil prices are close to bottoming. For scrap, if mills decide to reduce their prices further in July, collection will stop as margins for merchants have zeroed. In the coil department, all mills in Europe plan to idle their facilities for longer than usual this year due to poor sales and overcapacity, sources tell Kallanish.

The European stainless flat steel market continues to be sluggish for sales of both hot rolled coil and its derivatives. Activity is quiet in all countries, with clients ordering back-to-back due to lower consumption. However, steelmakers are beginning to lose money at current selling prices because of the high costs of production.

“Before the summer stoppages in Europe, customers need to replenish their stocks. While some steelmakers will perform maintenance stoppages in August, like in Italy, France and Spain, others in northern Europe, particularly German companies, will slow activity in July. Mills’ planned stoppages in August will push their deliveries for new orders into September and large contract customers will need to buy some volumes for September,” a source comments. European steelmakers’ coil lead times are now in August.

At present, stainless cold rolled coil in northern Europe is at €2,200/tonne ($2,409) delivered on average and HRC at about €2,050-2,100/t delivered. Scrap prices in Europe are also approaching the limit of €1,000/t delivered for 304 but extreme shortages and the high cost of buying this grade for merchants is causing these levels to be unsustainable.

Natalia Capra France