The European market for hot-rolled coils has seen prices rise to a two-year high in recent weeks, exacerbated by a steadily worsening supply shortage.
Plants cut back on steel coils production
The mills have been cutting back production until “real demand” picks up again and customers are desperately trying to secure first quarter volumes regardless of price, sources told S&P Global Platts on December 3.
European steel plants sold out until April 2021
Several market-leading factories are sold out until April 2021. And hot-rolled coils and hot-dip galvanized products are increasingly difficult to obtain. Unprecedented automotive demand, long delivery times and unwanted import offers mean that secondary customers have few alternatives.
Sources said that steel producers would continue to limit production at least until the second quarter.
“We continue to drive prices higher because availability is very low and there are no imports,” a European steel mill source told S&P Global Platts.
EU crude steel production continues to decline
In the European Union, crude steel production fell for the tenth consecutive month in October, according to data from the Worldsteel Association.
Steel coil shortage not limited to Europe
However, the coil shortage dilemma is not limited to Europe. The Japanese mills were equally unprepared for the steep rise in demand from the automotive sector.
According to Worldsteel, Japan produced 7.2 million tons of crude steel in October, 11.7% less than in October 2019.
Italian sources reported that due to the tight supply they were not able to meet the total quantities for most of their orders.
EU Commission must enable imports from CIS or Asia
More and more voices are being raised that the European Commission must do more to enable imports into the EU, for example, from nearby CIS countries or from Asia. Otherwise the demand cannot be satisfied in the long term.
Source: spglobal.com
Steelnews.biz constantly searches the Internet for important, interesting and informative news.
Are you missing an information, do you have a question or are you interested that we refer to a certain article or press release of Steelnews.biz? Then simply contact us now.
We always try to refer to the correct source of a news item.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
