EU coil market still soft as lead times slip

European coil pricing remains under pressure, with southern European and import offers weighing on levels in the northwest of the continent, sources told Argus.

One Benelux-based stockholder said he bought Italian coil at €50/t ($57.60/t) below the price offered by a large northwest European mill. Material from the latter scheduled for November arrival has already been delivered, suggesting lead times have shortened

Another service centre tried to cancel material on order at the mill, but was told it had already been produced. The mill was previously thought to have been booked out for the fourth quarter.

One buyer asked his supplier to hold ordered material for longer because real demand has tapered. Apparent demand is also suffering, with stockists nervous about competitive import prices, the quota situation and a slippage in buying led by the automotive sector.

Turkish cold-reduced was available at €585/t cif into northern Europe, according to one German trader. Hot rolled was also heard into Antwerp around €510/t cif, and in some cases lower. These prices are substantially below mills' targets, and have had a significant impact on purchasing attitudes. Ukrainian cold-rolled coil has also been competitive, but it has a much narrower consumer base and can be more expensive to service.

Stocks are thought to be sufficient. German finished steel stocks totalled 2.51mn t in August, suggesting buyers can afford to wait for further clarity before returning to the market.

Most sources expect activity to remain relatively subdued ahead of a major industry gathering in Hannover in a few weeks. Some buyers are waiting for automotive contracts to be signed for clues about market direction.

Material on order that may arrive close to the European safeguarding quotas becoming critical — when the duty becomes applicable — will be held at ports for the maximum 90 days' allowance, or put into bonded warehouses, traders said. The material can then clear customs once definitive quotas have been announced. This could cause a significant amount of coil to clear customs around February, when the definitive measures are in place.