Mixed Trend in EU Flat
Product Steel Prices in July
German consumption of strip mill products is healthy. Availability
of commodity grade material is good. The steelmakers are trying to
implement a rise of €20/30 per tonne in the general market, for
October deliveries. Currently, service centres are well booked for
third trimester business, but resale margins remain under negative
pressure. Third country import offers show little price advantage
against domestically produced steel.
In France, distributors supplying the auto industry continue to
indicate very strong sales. Supply difficulties were reported, with
some delivery problems regarding material sourced in the Netherlands
and Germany. Spot values were stable or slightly down, in July. The
steelmakers’ announcements, to raise figures by €20 per tonne, met
with a large degree of resistance. Service centres are not willing
to order at increased prices, considering the level of their resale
values and competition in that sector from mill-owned distributors.
Growth in Italy’s manufacturing sector improved, during June.
However, general market sentiment has softened. Nevertheless, the
recent price erosion was halted, in July, with the price trend
reverting to a positive one, albeit from a very low base. All
local/regional mills raised list prices, in tandem, as slab costs
escalated. Inventory levels were reduced, prompting buyers to make
stock purchases. Supply uncertainty exists due to the EC safeguard
investigation. Moreover, the majority of mills will, shortly, be
undertaking scheduled summer maintenance. Buyers anticipate further
hikes, after the holidays, in September. However, resale margins at
the service centres remain poor.
The performance of the UK manufacturing sector remained relatively
subdued, in June. Nevertheless, a number of steel stockholders
reported good levels of activity and quite strong demand. Their
resale prices continue to recover but are still not at the required
level. Independent distributors continue to complain that mill-owned
service centres are selling aggressively, thus lowering customers’
price expectations. Trader stock levels have dwindled as they are
unwilling to take the risk that retrospective duties may be applied.
Basis values, quoted by steelmakers, are similar to those reported,
in June. Delivery lead times are extending into October.
Strip mill product basis prices remained stable, in Belgium, in
July. Sellers would like to impose a rise but the onset of the
Belgian holidays, in mid-July, have, so far, enabled buyers to
postpone purchasing decisions. Distributors’ resale values, which
were reflecting steel costs, recently weakened, as end-users refused
to pay more. Inventory levels are normal to low. Customers complain
of delayed deliveries from the steelmakers.
Spanish manufacturing business conditions continued to improve, at
the end of the second quarter 2018. However, the rate of growth in
the sector remained muted, compared with earlier in the year.
Nevertheless, distributors report a relatively quiet market. Despite
the mills’ announcements of a €20 per tonne rise, strip mill product
figures were stable, in July. Currently, import offers are
uncompetitive. Buyers anticipate that domestic price increases will
be secured, once negotiations are concluded.
Source: MEPS -
European Steel Review
- July 2018 Issue
Also See: MEPS
All Products Composite Purchasing Price & Index
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