EU Steel Price Revival
Expected in Early 2018
Strip mill product basis prices were stable in
most northern European markets, in December, according to the latest
edition of MEPS European Steel Review. However, Italian figures
weakened and Spanish buyers accepted a small increase. Regional
producers continue to promote further rises, in order to achieve
their new target values. They remain confident that these can be
implemented in early 2018. An ongoing lack of attractive third
country offers should help to support the producers’ proposals.
Demand slowed because of the approaching Christmas holiday.
Moreover, many companies reduce their inventories ahead of their
financial year-end. Service centre buyers were loath to pay more as
their resale values do not always cover, even current, replacement
Near-record growth was noted in Germany’s manufacturing sector, in
November. The steel sector, however, was quiet, in early December,
with demand likely to remain subdued until after the new year.
Distributors are living off their inventories and not looking to
rebuild their stocks until 2018. Trade defence measures have led to
the curtailment of import volumes. Moreover, prices were
uncompetitive, in December.
Strip mill product prices were stable, in France, this month. Buyers
believe that the trend will be slightly positive at the beginning of
next year. Delivery lead times are extending and limited quantities
of material are available. Activity slowed, in late November,
particularly in the distribution sector.
Italy’s manufacturing sector recorded substantial improvement during
November. Nevertheless, steel demand slowed considerably, ahead of
the Christmas vacation period, undermining mills’ efforts to retain
November price levels. Suppliers continue to talk of increases for
first trimester 2018 business. Service centres report that a number
of their customers are only purchasing small quantities at any one
time, suspecting that prices may go lower. Import opportunities are
UK sales of strip mill products are quite slow, at the moment.
Customers are holding off making purchasing decisions for as long as
possible as they try to ignore the steelmakers’ price hike
proposals. Distributors report that their resale values are
insufficient to meet the increases suggested for the first quarter
of 2018. Inventories at the service centres are down slightly from
those in late summer. Port stocks are also reduced.
Resistance from buyers, regarding further rises for January/February
2018, was noted in the Belgian market, in December. Demand is
relatively slow due to the approaching Christmas holiday but
underlying consumption remains good. Service centres are required to
reduce stocks before the year-end. This resulted in a number of low
The rate of growth in Spanish manufacturing output grew for the
third successive month, in November, reaching its highest point
since May 2015. Steel demand is reasonably good. In December, large
distributors settled for their January/February 2018 deliveries,
conceding a rise for strip mill products. Resale values continue to
be problematic. The weakness of the US dollar has made third country
import offers more competitive, of late.
Source: MEPS -
European Steel Review
- December 2017 Issue
MEPS - EU Steel
Sign up for free
MEPS steel news alerts