EU STEEL MARKET PRICES UNDER NEGATIVE PRESSURE IN JUNE - MEPS
MEPS reports that, activity in the European flat
products sector is unseasonally quiet. Although underlying demand is
slowly recovering in several countries, it remains a buyers’ market.
Mills have reported heavier order intake lately, as consumption
strengthens but supply is still in surplus and delivery lead times
quite short. Third country import prices are falling as iron ore
costs move down. The reduction in outlay on raw materials is also
undermining domestic basis values.
Material can be delivered quite quickly in Germany. Mills are
competing strongly for orders. Consequently, the proposed price rise
appears to have been put on hold, although producers are not saying
this officially. In fact, MEPS has noted some downward movements.
Distributors, keen to manage their stocks, are only purchasing when
they know they already have orders to fulfil.
News of the French economy is disappointing as manufacturing output
fell in April. The steelmakers are looking for rises, offering
material at higher prices. However, in reality, when a deal is made
and steel is ordered, prices are at the same level as a month ago.
MEPS research showed no recent price improvements in the Italian
market even though the producers are pushing hard for increases.
Demand is static and, with the summer holidays approaching,
companies are already destocking. Customers are waiting until the
last possible moment if they need to buy. Delivery lead times are
very short because supplying mills are not fully booked. If
anything, the economy is likely to slow in July for seasonal
Although there is more confidence and optimism in the UK flat
products market, some prices continue to drift, partly due to the
strength of sterling which is encouraging cheaper imports from
mainland Europe and further afield.
In Belgium, end-user demand is slower than was predicted at the
start of the year. Both they and the distributors are keeping stocks
to a minimum. Service centre resale values have been under pressure
for several months, creating financial problems for some companies.
Steelmakers have stopped trying to lift basis numbers and market
players can envisage no movement before the holidays in July and
The business climate in Spain is improving, albeit from a low point.
More credit is available from the banking sector and the government
has provided some tax relief for companies. Steel demand is slowly
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