During last week contradictory reports are emerging for different products in European market.
On one hand, there are sudden and sharp price increases for scarp, pig iron and billets. Billet prices went up by USD 20 per tonne to USD 25 per tonne to reach almost USD 450 per tonne CFR FO Italy after a period of low of USD 400 per tonne. Pig iron prices also went up by USD 20 per tonne to reach USD 285 per tonne CFR FO and market players expect to see USD 310 per tonne eve soon. In addition, Turkish buyers are already paying USD 290 per tonne CFR FO for good HMS 1/2 and seems that price are still edging up
On the other hand some other products are in deep crisis and prices are falling to almost minimum record. Negative trend is likely to push the prices of merchant bars below the 100 per tonne mark. Beams are also reported at their historical minimum level as some Italian H beams producers have been able to sell during last month only 25% to 30% of their installed monthly capacity.
Flat products are also going through contradictory situations The main reason for this spurt is pre winter finalization of buying deals to receive the materials when activities restart in 2010.
As usual a right prediction is extremely difficult. However, looking at the levels of consumption, we don't see any possible better scenario in the short period.
1. Plates – Last to catch up flurry
Plates are the last wheel of the truck as increases, in very few cases, are only around EUR 5 per tonne.
Plates are on the contrary remaining basically on the same levels. A possible help for a next round of positive trend could come from the still low production levels of main plate producers of EU and neighbouring areas including Ukraine.
The pressure on this product is still quite heavy, as the lack of orders in the ship building industry and in infrastructures is continuing deep and without perspectives of improvement in the short term.
CIS producers are still selling at prices ranging between EUR 365 per tonne to EUR 375 per tonne CIF FO basis plus extras, with payment at 90 days from BL date, as against previous levels of EUR 360 per tonne to EUR 365 per tonne.
2. Hot Rolled Coils - On the run
HR is well in demand and EU and CIS producers are asking for higher prices, trying to get closer to EUR 280 per tonne CFRFO. However third countries suppliers such as Mobarakeh and some Chinese Mills are still quoting prices around EUR 360 per tonne CFR FO, which is apparently hindering general price increase.
Price of HRC is definitely going up in Europe, as it has reached the level of EUR 370 per tonne base plus extras CFR FO.
Although buyers are pushing for short delivery time but main CIS and Ukrainian Mills are apparently already fully booked till January and in some cases even till March 2010.
3. Cold Rolled coils – in line with HR
4. Hot Dipped Galvanized – Delight to sellers
HDG is also under upward pressure, with Chinese Mills asking for increases of EUR 10 per tonne to EUR 20 per tonne. Buyers are reluctant to pay, however the general feeling is that prices would definitely go up.
Also HDG is slightly recovering positions, coming up to EUR 490 per tonne to EUR 495 per tonne CFR FO effective for an average 0.60 mm thickness and coating Z140 to Z180.
PPGI is following the suite with some EUR 20 per tonne increase, having reached now around EUR 590 per tonne to EUR 595 per tonne for thickness 0.50 and up for standard RAL colors.