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Skyrocketing stainless coil plunges EU market into lull

The European stainless steel coil shortage has persisted this month despite the increased volume of purchases from the import market. European mills’ coil price hikes are said to have become unsustainable, Kallanish learns from market sources.

While service centres consider final demand lively and reliable in both southern and northern European countries, European coil sales activity has reached a standoff due to high hot and cold rolled coil prices from the four European mills. Large buyers are now refusing to purchase European material priced based on the formula comprising base price plus the ever-rising alloy surcharges.

Using the traditional base plus alloy formula, CRC in Europe is now being offered and sometimes sold at the “exorbitant” price of over €4,400/tonne ($4,962) delivered, sources say. This level has decimated coil sales activity. Most buyers are now purchasing Chinese, Taiwanese, or other Asian-origin material. Even including duty, import offers are more competitive than European prices. All EU mills are quoting long delivery times of between April and May.

To wake up the sleepy market, some mills are said to be considering a fixed price for both CRC and HRC, to finally free buyers from the current formula. With a fixed price, CRC may reach approximately €4,000/t delivered, which may be a more acceptable value for buyers and still elevated enough for producers to keep their margins.

European stainless HRC prices have stopped increasing and remain at a more reasonable value of €3,800-3,900/t delivered, due to lower-priced import offers, particularly from China.

Including duty, Chinese CRC was transacted in recent days at €3,650-3,700/t cfr southern Europe, while HRC was at €3,200/t cfr last month, meaning a significant gap between European and Chinese values. Last month, CRC was also sold by Indian steelmakers into Europe at €3,700-3,750/t cfr including import duty, sources suggest. This material will however also be delivered in April and will not help the current coil shortage.

Meanwhile in Europe, nickel prices skyrocketed to $24,400/t on 20 January, only to decline to $22,800 on 31 January, Kallanish notes.

Natalia Capra France