The European market for hot rolled coils is in a buying frenzy over what is left of the material available from European mills for the end of the first quarter of next year, S&P Global Platts reported on November 26.
Purchasing sources said they would prioritize availability over price and accept “any price”.
More and more mills disappear from the market
However, as more and more mills disappear from the market, it is proving increasingly difficult to find material on the spot market.
One mill source said that they will leave the market this week as the first quarter is full and that they will return to the market next week with pricing for the second quarter.
“Customers are calling every day to look for Q1 quantities, but we’re not in the market now,” the mill source said.
The European factories are facing a high order backlog
The European factories are facing a high order backlog, which is causing delays in the deliveries planned for December, while the lead times of the factories are now as long as it normally takes Asian imports to arrive in Europe.
“The backlog will not be reduced. Now the last buyers have turned to the steel service centers, which had a damn good month, but the fear is that by February there will be no material left,” said the plant’s source.
Most steel mills are still having production cutbacks
Although most plants are still having production cutbacks, the question is when the plants will return to full capacity utilization. Sources on the buying side said they were worried about how long the shortage will last and said they no longer see mills increasing production significantly.
“The factories are having problems with labor, shortages of raw materials and higher raw materials. Even if they were to return to pre-crisis levels, we would still have a shortage because there is a complete lack of imports,” the mill source said.
A German stockist said he had bought enough material in stock and probably a little more than usual, as prices are expected to continue to rise until the end of the year.
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