AUGAF
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • CommoditiesNew
  • Contact
No Result
View All Result
PSX
Currencies
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • CommoditiesNew
  • Contact
No Result
View All Result
AUGAF
No Result
View All Result
Home Finance

European auto contract negotiations start with prices expected to double on year

European auto contract negotiations start with prices expected to double on year

admin-augaf by admin-augaf
September 7, 2021
in Finance, International
Reading Time: 4 mins read
0
European auto contract negotiations start with prices expected to double on year

European auto contract negotiations start with prices expected to double on year

Share on FacebookShare on TwitterWhatsapp

Frankfurt September 7 2021: Annual contract negotiations between steel mills and automobile producers are in full swing in September, with finalized 2022 prices expected to double last year's figures following significant price increases over the last year for most steel products.

With 2021 automobile demand hampered by the acute semiconductor and chip shortage, European steelmakers are looking for a turnaround for 2022 contracts as they hope to regain revenue lost from contracts in place for this year. With the automobile industry still contending with the shortage, sources have noted an influx of hot-dipped galvanized steel availability, with previously agreed allocations now serving peripheral sectors in desperate need of material.

Recent data from German stockholder association BDS showed flat steel stocks rose 8.5% from June, to 1.2 million mt in July.


A L S O || R E A D

Japan To Extend Cooperation In Auto And Mobile Manufacturing: Khusro


"The semiconductor issue will go on for some time, and this is freeing up material," a UK-based mill source said. "Activity levels in August were the worst I've ever seen -- even taking into consideration the holiday period. People are reluctant to book because we are at the peak of pricing."

Pricing uncertainty limits volume intake

European hot-rolled coil prices have fallen considerably in the last several weeks due to import pressure and limited take-up from automobile manufacturers, with trading still quiet as buyers remain cautious in anticipation of further price softening.

Since the start of July, North European HRC prices have fallen by Eur62.50/mt to Eur1,120/mt ex-works Ruhr, and in Italy, prices dropped more considerably by Eur94.50/mt to Eur1,028/mt ex-works Italy.

A UK-based service center source said automobile contracts were heard finalized between Eur1,150-1,170/mt ex-works Ruhr, an increase of more than Eur600/mt year on year, and in one case, a mill had asked for as much as Eur1,250/mt ex-works Ruhr.

A Switzerland-based trader confirmed next year's automobile contracts were likely to double in comparison to 2021, with levels expected to exceed the psychological level of Eur1,100-1,150 mt ex-works Ruhr.

Meanwhile, a Benelux-based mill source said it was still premature to discuss annual automobile contracts, with auto buy-side participants apprehensive about locking in high-priced contracts.

"The automobile industry is in shambles; I don't know what will happen with their supply chains. They are anxious to step into high-priced contracts," the mill source said.

German auto output faltered in August

Contract volumes for 2022 were heard to have been negotiated between mills and automobile producers prior to the summer period irrespective of price, with the outcome of these discussions coming up short with less expected volumes. This has led to tension in the market and mills standing by offering higher prices.

"It was always good to do automobile business because you had fixed volumes for a stable price, but now volumes are not fixed and it is difficult to get a deal that assures certainty on longer-term pricing contracts," the Benelux-based mill source said, adding demand fluctuations had a considerable impact on negotiations.

According to data from the Verband der Automobilindustrie, 193,300 new passenger cars were registered in Germany during August -- 23% less than in the same month of 2020.

Data also showed foreign business had relaxed in August, with German automobile producers recording a 21% drop in orders in the past month and domestic production falling 32%, with the decline in production largely due to the supply bottleneck of semiconductors and chips.

A source from a large Italian service center said he was optimistic that prices would increase despite the slowdown in apparent spot demand and said Italian producers had not started any formal negotiations.

Italian spot prices are expected to remain stable during September, with mills focused on maintaining higher prices to secure lucrative automobile contract negotiations.

The same source added that mills will aim to keep prices firm, given there was little pressure from imports as Turkish and Indian quotas were exhausted.

In contrast, HDG imports from Vietnam were heard as low as Eur1,100-1,110/mt CIF Antwerp, with Vietnamese producers not inhibited by the European import safeguard system.

admin-augaf

admin-augaf

Related Posts

Image: Trump
International

Trump Hit With Criminal Charges, First Time For A US Ex-President

March 31, 2023
Pakistan Finance Minister Proposes Automated System For Population Census
Business

Pakistan Finance Minister Proposes Automated System For Population Census

March 30, 2023
ECC Approves Draft Transaction Advisory Agreement For Outsourcing Three Airports
Business

ECC Approves Draft Transaction Advisory Agreement For Outsourcing Three Airports

March 30, 2023

Recent News

Image: Trump

Trump Hit With Criminal Charges, First Time For A US Ex-President

March 31, 2023
Pakistan Finance Minister Proposes Automated System For Population Census

Pakistan Finance Minister Proposes Automated System For Population Census

March 30, 2023
ECC Approves Draft Transaction Advisory Agreement For Outsourcing Three Airports

ECC Approves Draft Transaction Advisory Agreement For Outsourcing Three Airports

March 30, 2023
IMF

Sovereign Default At Record High, Slow Restructuring Add Further Cost

March 30, 2023
Pakistan Accord With 16 Foreign Countries in Final Stages To Give Boost To Declining Remittances

Pakistan Central Bank Reserves Decrease For The First Time In Seven Weeks

March 30, 2023

Popular News

  • Central Directorate of National Savings

    President Prohibit National Savings For Changing Rates on Existing Certificates Retrospectively

    0 shares
    Share 0 Tweet 0
  • Pakistan Rupee Appreciate against Dollar in Interbank as IMF Confirmed Board Review Date

    0 shares
    Share 0 Tweet 0
  • Pakistan Rupee Fall After 13 Days of Successive Gains against Dollar on Lower Remittances and Strengthening of US Dollar

    0 shares
    Share 0 Tweet 0
  • Pakistan Central Bank Issued Show Cause Notice to Eight Banks Over Currency Speculation

    0 shares
    Share 0 Tweet 0
  • Pakistan Rupee Fall for the Straight Second Day Against Dollar on Opening of LCs

    0 shares
    Share 0 Tweet 0

Categories

  • Budget
  • Business
  • Culture
  • Finance
  • International
  • National
  • News
  • Politics
  • PTI
  • Sports
  • Technology
AUGAF Logo

Follow us on social media:

Recent News

  • Trump Hit With Criminal Charges, First Time For A US Ex-President
  • Pakistan Finance Minister Proposes Automated System For Population Census
  • ECC Approves Draft Transaction Advisory Agreement For Outsourcing Three Airports

Category

  • Budget
  • Business
  • Culture
  • Finance
  • International
  • National
  • News
  • Politics
  • PTI
  • Sports
  • Technology

Recent News

Image: Trump

Trump Hit With Criminal Charges, First Time For A US Ex-President

March 31, 2023
Pakistan Finance Minister Proposes Automated System For Population Census

Pakistan Finance Minister Proposes Automated System For Population Census

March 30, 2023
  • Home
  • Politics
  • News
  • Business
  • National
  • Finance
  • Technology
  • International

© 2021 AUGAF.

No Result
View All Result
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • Commodities
  • Contact

© 2021 AUGAF.