European market sources have expressed differing views on the future trajectory of coil prices following the EU’s safeguard measure extension and residual quota revision proposal.

Some Dutch and German sources say the integrated mill groups have left the market, and will come back this coming week with potentially increased offer prices. “There is a bit of a stir among buyers because of that,” a Dutch manager tells Kallanish.

Meanwhile, one mill source is actually more prudent, saying his company is still making offers, and is reluctant to make hike announcements too soon. “We will have to wait for the [EU member] vote [on the safeguard extension] this week before we make a decision,” he says. He also expressed some doubt if a big hike would make sense before the summer break.

Come September, however, his company will prepare for a “major increase”, which many buyers expect to come sooner or later. Although a big trigger for demand is not in sight, he says the reduction of interest rates in Europe would help to revive the construction industry, for example.

The increase is yet to be given a solid figure, but the Dutch manager says he has heard of “at least” €50/tonne ($54). Over the past three months, prices have moved only slightly back and forth, between €610 and €640 ex-works for hot rolled coil. The lowest figure of €605/t was heard from the Netherlands, while most German sources cited €620-640.

Despite reports of particularly weak prices for cold rolled coil, Dutch and German sources say the price premium over HRC has been in the normal €80/t range, with galv fetching €100-120/t on top of HRC.

One German distributor’s manager says she has observed the premium for galv becoming narrower downstream, when the product is cut and slit. According to her, this is a sign that service centres are trying to snatch business by selling at intake prices.

One German trader is even more explicit about this behaviour at distributor level, and that it covers all strip products. “It’s mainly the distributors that need to step on the brake to turn the trend, really. Sales prices here sometimes were lower than the intake price [for HRC] of €630/620,” he notes. Without giving names, he says he observed this among big distribution players.