EU GALVANISED COIL
PRICES REACH EIGHT-AND-A-HALF-YEAR HIGH IN APRIL
The MEPS EU average hot dipped galvanised coil
transaction value has soared, during the last twelve months, due to
tight supply and rising zinc prices. The figure in April now stands
at its highest point since October 2008. However, the upward price
trend slowed significantly, this month.
Slight negative sentiment was noted, in several countries, during
negotiations for purchases of hot rolled coil, in April. The
tendency was strongest in the south of Europe, where cold rolled
coil figures also softened.
Order books at domestic mills are healthy and capacity utilisation
is high. However, third country import prices, from sources not
affected by antidumping measures, are lower than a month ago and
attractive to steel buyers. Moreover, many of these exporters quote
delivery lead times that compare quite favourably with those of
domestic steelmakers. For the moment, local producers are not
targeting further price advances.
Conditions within the German manufacturing sector continue to
strengthen. Steel consumption is firm. Service centres purchased
substantial quantities of strip mill products in advance of recent
price hikes. Inventories are now higher than at the start of the
year and still growing. Availability of third country material, in
standard grades, is plentiful, from the docks at Antwerp, at
advantageous prices. The upward price momentum on domestically
produced hot and cold rolled coil has stalled.
The French market remains stable in terms of activity and price.
Buyers anticipate little change in the short term. Decoilers are
carrying relatively large inventories, leading to reductions in the
selling values of their hot and cold rolled sheets. Distributors are
reported to be quite well-stocked or awaiting deliveries of orders
The weakening sentiment that hit the Italian market, this month, is
reflected in domestic basis figures. Local demand appears to have
slowed, whilst inventories at the service centres are high.
End-users no longer need material urgently. Resale values, in
general, are keeping pace with mill movements.
UK manufacturing output continued to expand, in March. Distributors
report that sales of strip mill products are good and profit margins
are maintained, in most instances. With the exception of hot rolled
coil, forward prices are firm, this month. However, inventory levels
throughout the supply chain are high. This has prevented further
increases from being implemented. Buyers are behaving cautiously as
they anticipate small price contractions over the summer.
Belgian suppliers no longer target an increase in basis figures for
hot and cold rolled coil. Few advances were noted, with the
exception of hot dipped galvanised coil prices, which were driven up
by the cost of zinc. Distributors’ inventories are bloated, allowing
them to postpone purchases at today’s prices. Customers now show
more interest in third country imports.
Spanish manufacturing output continued to rise, in March. However,
the rate of growth eased, for the third consecutive month.
Underlying steel demand is satisfactory. However, the market is
quiet. Service centres hold sufficient stock to cover present
requirements, with no urgency to re-order. Consequently, basis
values have softened. Distributors need to manage this reversal in
the price trend to impart the least damage on their profit margins.
For the moment, their selling values are decreasing at a faster rate
than their purchasing prices.
Source: MEPS -
European Steel Review
- April 2017 Issue
MEPS - EU Steel
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