EUROPEAN STEEL PRICE MARKET ROUND UP FROM MEPS
An imbalance in supply and demand has
continued to weigh heavily on European flat product prices. Despite
optimistic macroeconomic indicators in several countries, customers
are still hesitant to place orders. March’s sudden dip in raw
material costs caused a negative reaction in the market. Now that
the trend has reversed somewhat, we may see prices bottom out.
Indeed, several buyers have commented that the mills have recently
become quite resistant to granting further discounts.
Although the business climate is relatively good in Germany, steel
prices have been under pressure because the market is being targeted
by producers in other EU countries, where demand is more subdued.
There has been no improvement in French activity. End-user demand on
the service centres is poor and resale prices are described as
‘awful’. Meanwhile, the mills have tried to resist downward price
pressure as best they can.
In Italy, Ilva reduced prices for new orders due to competitive
offers from China and a reduction in iron ore costs. Business
activity is slow, with very few deals being concluded. Market
sentiment is poor. There is a lack of demand from end-users.
Consequently, service centres are reluctant to purchase new
material. Buyers are postponing placing orders because they fear
that the bottom has not been reached.
UK flat product service centres report that both demand and profit
margins, in March, remained stable to good. However, mill basis
figures began to fall when raw material costs declined but have
steadied now. Nevertheless, buyers are sceptical that the, recently
announced, June hike can be secured, due to oversupply.
In Belgium, the positive economic indicators are not reflected in
distributors’ sales. There are many imports from Southern Europe
that, even with relatively high transport costs, are very
competitively priced. This has created negative pressure in the
marketplace. Even though the mills are proposing an increase for
June, buyers do not appear to be prepared to pay more.
Sentiment is starting to recover a little in Spain due to better
economic forecasts for 2014. However, the steel market remains quiet
and prices have continued to slump. Very little business was
actually placed at the lower prices because, in late March, buyers
believed further discounts were possible. Opinion has now changed
because the mills have become reluctant to make commitments at those
Source: MEPS -
European Steel Review
MEPS - EU Steel
up for free MEPS steel news alerts