IMPORT THREAT KEEPS MEPS BENCHMARK EU AVERAGE STEEL PRICE FLAT –
MEPS INTERNATIONAL LTD
Overall, demand for flat
products is reasonable in Western Europe. Buyers are anticipating
the arrival of large quantities of third country material during the
summer, particularly at ports in the south. Following concerns about
the increasing impact of imports on the EU steel market, the
European Commission has initiated an antidumping investigation into
cold rolled coil imports from China and Russia. Negotiations have
started between the domestic mills and the auto companies for second
half 2015 contracts. Producers would like a rollover of the first
half prices but the carmakers are expected to ask for lower values
because the steelmakers’ input costs are down.
Demand is holding up in Germany with business in the first six
months described as acceptable, with auto leading the way. Forecasts
suggest that building activity may be down slightly in the second
half. Buyers are receiving new offers from third country sources but
many consider the price benefits to be too small when compared to
the long delivery lead times. However, they are aware that large
volumes are already on the way. There is plenty of material quickly
available from domestic sources.
Activity on the French market is still weak in major consuming
sectors, such as construction and energy, whereas the auto industry
is faring satisfactorily. Competition between distributors is
fierce. As a result, a number of warehouses have closed down.
Ex-mill basis values have remained relatively stable since last
month. There is some pressure from overseas suppliers, which has
left domestic producers struggling to maintain selling figures.
Import quantities have climbed since the start of the year.
Although internal demand remains depressed in Italy, there are small
signs of recovery, mainly in the auto sector, so far. Domestic basis
values have deteriorated further, driven down by poor sales, high
levels of availability and increasingly aggressive offers from China
and India. Considerable volumes have been booked for arrival during
the summer holidays. As a result, buyers do not expect prices to
recover during 2015. Competition in the distribution sector is
severe, with service centres so hungry for business that they
concede discounts on a daily basis.
Consumption is said to be reasonable in the UK, with the
manufacturing sector fairly busy. Service centre sales have been
healthy. Stocks are well balanced with demand. Producers are willing
to be flexible during negotiations and prices are down, a little.
Resale values have declined in tandem with the ex-mill figures.
Belgian service centres are keeping inventories low because they can
obtain material quickly from local mills, who, in some instances,
are carrying stock. End-users are only purchasing what they need for
immediate use. Imports are available from China and Russia.
Underlying consumption is slowly improving in Spain, where domestic
basis numbers are unchanged from May. However, the market is slow.
The summer vacation period is approaching and large quantities of
pre-booked, foreign material are still to arrive.
European Steel Review
- June Issue
MEPS - EU Steel
up for free MEPS steel news alerts