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.
"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."