European Steel Prices
Rise as Foreign Competition Wanes
Strip mill product basis prices continue to
move up in northern and southern Europe, in February. Regional
producers propose further rises, in order to achieve their new
target values. Imports are playing only a minor role in the market,
at present, as a result of trade defence measures and unattractive
quotations from third country suppliers. Delivery lead times from
domestic steelmakers have extended, although no shortages are
reported. Underlying consumption is strong, in most countries.
Moreover, distributors are restocking. Nevertheless, buyers remain
In Germany, domestic mill delivery lead times continue to lengthen.
Order intake is good, certainly through the first half of 2018.
Service centre inventories are reasonable. Imports from third
country sources are available but their prices are too high to be
competitive. Recent business was negotiated at figures above those
reported in January, but not yet at the new target levels set by the
End-user activity is still at a good level, in France, even though
purchasing in January started slowly. Distributors are now well
stocked, as significant quantities of material were ordered at the
end of last year, some of which is still being delivered. Mills
implemented price rises towards the end of January and are now
demanding more. Activity is strong in all steel-consuming sectors,
with delivery lead times stretching to May/July. Import offers are
currently in line with domestic prices.
Italy’s manufacturing sector enjoyed a strong start to 2018,
registering the highest growth in output since early 2011. Steel
inventories are reduced. The improvement in purchasing is supported
by a recovery in real demand and a degree of restocking.
Expectations for the first half of 2018 are good for both the auto
and mechanical engineering sectors. Construction activity shows only
slight progress. Flat product prices escalated, in February.
Supplying mills are full, or overbooked. Delivery delays are
reported and lead times have rapidly lengthened. Attractive third
country import offers are scarce.
Manufacturing growth slowed, in the UK, in January. Inventories at
the service centres are reducing and port stocks are at their lowest
for several years. Third country quotations are limited and those
that do exist continue to be more expensive than domestic offers.
The mills implemented higher basis prices for second trimester
deliveries. Service centres complain that resale values are not
satisfactory, even on steel procured before the hike. Consequently,
they only purchase for their immediate needs.
Belgian demand is brisk and customers are optimistic regarding
future business levels. Domestic steelmakers pushed, successfully,
for price advances for deliveries at the beginning of the second
quarter. Competitive offers from third country suppliers are scarce.
Quantities from European mills are also limited, with delivery lead
times extending into the second trimester and beyond. Buyers expect
values to be even higher when the next round of deals are finalised.
Resale prices are also climbing.
Business conditions in the Spanish manufacturing sector continued to
improve markedly at the start of 2018. Distributors of strip mill
products are busy. However, it is still a struggle for them to
recover the escalating ex-mill costs from their customers. In
February, buyers settled orders for their second quarter deliveries
at higher prices than in the previous month. As European basis
numbers continue to move up, a number of companies are starting to
consider buying imported material.
Source: MEPS -
European Steel Review
- February 2018 Issue
Also See: MEPS
All Products Composite Purchasing Price & Index
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