Cookie & Privacy Policy

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. View the privacy policy to find out more here.

Kallanish Kallanish

Knowledge matters Knowledge matters

October, 24th 2019

Free Trial Buy Subscription
MAY 31
10:50

European tube suppliers struggle to lower discounts

604 Views

European tube prices are remaining stable in transactions. Some price recovery is expected in the coming weeks in line with the recent increases implemented by coil and tube producers in Europe, buyers tell Kallanish.

Both an Italian and a French buyer say that demand remains low for welded tube and, in spite of re-rollers asking for €20-30/t increases, last week’s transactions were carried out at old prices.

The level of discount in France, Italy, Germany and Benelux is hovering at around 42 points with some peaks at 43 points. Each point of discount equates to €10/tonne ($11.1/t), Kallanish notes. Re-rollers are paying higher prices for hot rolled coil and are bringing down discounts gradually to the level of 39-40 points. “The trouble is with final demand from large end-users sector in Europe such as the automotive and mechanical engineering sectors. We are purchasing, but we buy volumes that are lower than those in 2018. The current increases will mainly stop prices from falling further and some increase will happen, but uncertainty is too strong and downstream demand is both poor and slow,” a source comments.

Buyers in Europe remain extremely cautious. One source believes that there is oversupply in the tube sector, especially considering the current slowing demand.