AS MEPS PREDICTED - EU
STEEL PRICES TURNED DOWN IN NOVEMBER
Flat products demand is slow across the
region. Customers, wanting to keep stocks low for the remainder of
the year, are purchasing cautiously. Recently, many steelmakers have
been prepared to accept slightly lower prices as they try to fill
their rolling schedules. In early November, ArcelorMittal announced
its intention to lift first quarter 2014 basis values by €30/40 per
tonne, citing higher raw material costs and anticipated customer
restocking. Other suppliers are likely to make similar moves. Many
buyers believe it unlikely that the increase will be secured for
In Germany, steelmakers have found it impossible to maintain basis
figures at the higher level achieved at the start of this quarter.
Mill order intake has slowed as companies reduce stocks and only buy
what they require for the next two months. Service centres will
probably need to purchase in early January which could lead to a
small uptick in prices then.
There has been a downward price adjustment in France but some
stabilisation is now expected. On the distribution side, resale
values are still depressed. Demand remains moderate, following the
slight upward momentum of September. End-users are still booking
material for the short term. Large service centres are reported to
be keeping their stocks as low as possible.
In Italy, overall demand is poor. There is a great deal of
competition between suppliers for the small amount of business
available. Following a modest upturn in late October, there is now
downward pressure on ex-mill prices. Moreover, producers are
concerned that if basis figures rise further, this will attract more
third country imports. Service centres report slow order intake and
reducing resale values.
There is a slightly negative price trend in the UK spot market at
present. Most quarterly contracts were finalised at the higher
figures reported in October. A number of stockists are reporting
better demand conditions across a wide variety of customers,
together with improving resale values. Traders have very little
material at the ports so supply has tightened. For new business,
importers are using exchange rate volatility to their advantage.
Source: MEPS -
European Steel Review
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