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EU coil market remains stable - 29 March 2012

The prices of hot-rolled coils and cold-rolled coils in Europe remain stable, as domestic producers have not been able to pass on further increases and purchasers are unsuccessfully bidding for discounts.

Base price for HRC remains at €545-550/t ex-works in Northern Europe. Most service centres and stockists in the area are concluding their purchases for May and June delivery. “The mills were hoping for a slight new price increase for their June production, but so far it wasn’t achieved,” a service centre in Belgium comments, quoting €550-560/t DDP base as the HRC market level and reporting offers from Italian mills at €545-550/t DDP base.

In Germany a major buyer reported bidding for May/June deliveries at a €10/t discount from April deliveries, but admitted he had not been successful yet. Another end-user in Belgium concurred, dismissing the possibility of discounts in the market this week.

Meanwhile, a source at a European producer confirmed sales being at €550/t ex-works base, in a market that was “not booming” but driven by real demand. North European mills are expected to remain firm on their sale position, while a number of sources confirmed that discounted offers from Italy were not available anymore.

CRC transaction prices are also stable this week, with sources reporting €620-640/t ex-works base from North European mills.

While the stability in the market is often seen by service centres as positive, sources continue to report difficulties in restoring the margins as competition in the market remains strong. A Belgian source mentioned achievable margins for sheet products are €20-50/t above current replacement costs.

 

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