THE MEPS EU ALL PRODUCTS
COMPOSITE STEEL PRICE DECLINES BY 3 PERCENT IN MAY
The negative price sentiment, noted last
month, for sales of hot and cold rolled coil, was more pronounced,
in May, in both the north and south of Europe. The upward trend for
hot dipped galvanised coil values has stalled and weakness is
evident in a number of countries. Spot business slowed amidst a
reluctance to commit to forward transactions. Stocks in the supply
chain are high. Quantities of material, ordered at the end of
2016/early 2017, in advance of price hikes, are now arriving at the
ports or at customers’ warehouses. Moreover, recent limitations on
domestic supply eased, as European mills caught up with order
backlogs. Producers in third countries that are currently unaffected
by EC antidumping measures, are making competitive offers to
European customers. The recent strengthening of the euro against the
US dollar also made overseas offers more attractive.
Underlying steel consumption is robust, in Germany, due to the
healthy economic situation. However, recent supply tightness has
eased considerably, especially for hot and cold rolled coil.
Standard grades and sizes are on offer, at attractive prices, from
sources such as India, Taiwan, Vietnam, South Korea and Russia.
Service centre stocks are bloated. The upward price momentum
reversed, in May.
A general downward adjustment was noted, in France. End-user
activity, which fell in April, compared with March, was only
moderate. May demand is expected to be slow, with several national
holidays and the uncertainty brought about by the election.
Decoilers are carrying relatively large inventories.
In general, Italian demand is stagnant and the market is fragile.
The only sectors performing well are auto and mechanical
engineering. As service centre stocks are high, buyers are in no
hurry to re-order. Their sales are sluggish, as end-users await
price developments. Resale values have fallen, resulting in poor
profit margins. Ex-works strip mill product figures are under
pressure due to the availability of competitively priced Indian,
Turkish, Egyptian and Malaysian offers.
The UK manufacturing industry continues to perform strongly.
Distributors report that end-users are busy. However, third
trimester business was transacted at reduced prices. Third country
import offers, from a variety of sources, are significantly cheaper
than their domestic counterparts. Deals have been concluded for
September arrival. In addition, inventory levels throughout the
supply chain remain high, including material ordered from mainland
European suppliers that is building up at the docks. Service centre
sales are still healthy but profit margins are under pressure.
Domestic basis figures have reached their peak in Belgium, with
negative movements monitored for third quarter deliveries.
Distributors’ inventories are abundant, allowing them to postpone
purchases. Import possibilities are available at competitive prices
but customers show little interest. We detect considerable caution
as many market participants believe that further decreases are
Spanish basis values are falling quite sharply, despite satisfactory
levels of consumption from a growing manufacturing sector. The
perception of a negative price trend led to a lack of order intake
at the mills, as buyers delayed purchasing decisions. End-users are
pressing distributors for price cuts. Import offers are plentiful,
for September arrival, but few deals have been concluded as
customers are in “wait and see” mode.
Source: MEPS -
European Steel Review
- May 2017 Issue
All Products Composite Purchasing Price & Index
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