EU STEEL MARKET PRICES CONTINUE TO WEAKEN AHEAD OF THE HOLIDAYS –
MEPS INTERNATIONAL LTD
Activity in the European flat
products market is quiet ahead of the summer holidays, according to
MEPS research. Although consumption is strengthening in several
countries and economic indicators are good, producers, keen to book
orders, have agreed to further small price reductions. Customers
have called for lower basis values, citing the mills’ relatively low
raw material costs and the availability of cheaper third country
As the domestic auto sector is busy, German steelmakers have strong
order books from those companies. However, other industrial sectors
are only performing at a level comparable to last year. Distributors
are reducing resale values in order to compete for business. Buyers
are of the opinion that further minor weakness could develop over
the next six to eight weeks.
Activity remains weak in the French market, where end-users have
short order books and are worried about the situation in September.
They are, therefore, unwilling to order material now. There will
only be a slight increase in orders for September delivery because
underlying consumption is poor. As a result, basis values have
eroded further, despite mills’ efforts to stabilise them
Market sentiment in the Italian steel sector is very negative. After
the Italian mills decided to drop basis values to encourage orders,
buyers report that their quotations are now being met by some North
European producers. End-users are worried about their stock levels
as all hopes of demand improvement, forecast earlier in the year,
have been dashed.
UK service centres report they have a wide range of busy customers.
Distributors’ sales volumes are well up on 2013 and, for some, the
best in several years. Nevertheless, mill prices remain low. Indeed,
they have continued to drift downwards, due to the strength of
sterling, which is serving to attract material from mainland Europe
and further afield.
There have been no major changes in the Belgian market, where demand
is flat. Distributors report that end-users are endlessly shopping
around to get bigger discounts. Stockholders from neighbouring
countries are also competing for business. Delivery lead times from
the steelmakers are extremely short.
There are signals that the Spanish economy is slowly reviving. New
projects are coming on stream and some of those that were postponed
during the financial crisis are being reactivated. It could be well
into the final quarter before this improvement makes itself felt in
the domestic steel industry, which, currently, is quite dull.
Suppliers are, therefore, looking continually to export markets.
European Steel Review
MEPS - EU Steel