The new price hike announced by ArcelorMittal, with a slight delay after a week of stability, will have surprised only few observers in northwestern Europe, even those who had voted for the rally to end.

“We think the period of price surge is over,” one German buyer stated pre-hike to Kallanish. But he conceded that the high prices of coil in the USA, scrap in Europe, and the price resurgence in China could easily prove him wrong. A Dutch source who anticipated a sideways pricing move had nevertheless simultaneously prepared for another hike, in view of shortages, long lead times and limited production capacity. As it turns out, arguments in favour of a hike have won.

However, s manager at a German cold-roller company finds that “mills are basically flexing their muscles” by making bold price calls without having anything to sell. According to him, hot rolled coil cannot be had until year-end.

Mills are however virtually forced to push prices up for psychological reasons. “If too many buyer folks start expecting price drops, they will stop buying,” the cold-roller argues. Keeping prices just flat would have the same effect, he maintains. Hence, “mills keep spreading the message: ’Dear customers, you better not speculate on prices falling’,” he adds.

As a significant curiosity, half-year contracts for the second half of 2021 were pushed by the mills in April already, rather than in June like in less agitated periods. Apparently, mills themselves did not believe in a sustained high, and made sure they signed deals at a time when HRC was at just above €900/tonne ($1,075).

Meanwhile, the latest hike takes the price of HRC to €1,200/t. Recent deals reached €1,170, although some were struck in a friendlier range of €1,130-1,150.