Northwest European coil distributors are restocking and receiving material as contracted, despite fears that mills would favor end users.
Supply shortage particularly painful for coil distributors and steel service centers
The supply shortage for coil products in Northwest Europe since October has been particularly painful for distributors and steel service centers (SSCs), which were the last to be supplied by mills.
Mills prefer to sell to consumers
At times when they have limited quantities, mills prefer to sell directly to consumers rather than to distributors, who add their own margins to the price, Kallanish hears from buyers on both sides. The beneficiaries of this game are often the automotive suppliers and the actual OEMs, while distributors’ inventories continue to empty.
Coil distributor halls almost completely empty
“I’ve seen warehouses in service centers where you could easily play soccer,” one source says of the empty inventories. “When demand came back, the mills served the OEMs first, although in March it was the OEMs who had hurt the mills with their sudden shutdowns of assembly lines and failure to accept more material while the blast furnaces were still running,” observes another source.
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