EUROPEAN STEEL PRICE
MARKET ROUNDUP FROM MEPS
The German market reached the bottom in July.
Since then, the mills have been firm on implementing rises. Although
a number of companies reported a busy July/August, it is not clear
whether real consumption has improved significantly. However, there
is certainly more speculative purchasing taking place as prices
increase and delivery lead times extend. Customers are accepting the
mills’ proposals because their options are limited.
In France, many service centres have been replenishing inventories.
Large buyers are reported to have started purchasing as early as the
end of July, as well as through August, before prices rose.
Customers now face generally longer delivery lead times, following
production cuts and shutdowns. However, it is too early to say
whether the improvement in mills’ order books means that increased
end-user activity is sustainable. Implementation of the higher
prices has been relatively slow, with few volumes being booked at
the beginning of September.
Although the Italian economy is showing only small signs of
recovery, it has at least stabilised. The steelmakers have
successfully secured increases. However, the initiative was driven
by climbing raw material costs rather than any significant uptick in
demand. Suppliers are hoping that another small hike will be
accepted in October. Certainly, import volumes have been falling.
July appeared to be the low point in the UK market, both in terms of
mood and prices. A number of distributors report that business
levels improved substantially during July and August and that
September has started well. Basis numbers began to pick up during
the summer and further advances cannot be ruled out. There are some
negative views among market participants regarding fourth quarter
developments should Brazil and India start selling more
aggressively, following their currency devaluations. So far, resale
values have not gone up as quickly as mill figures.
Business is extremely quiet in Spain, where the return from the long
holidays appears to be still underway with customers adopting a wait
and see approach. There were few developments during the summers but
buyers who did purchase small quantities have paid slightly more.
Service centres' resale values have not reacted to market movements
so far. There are few third country imports being booked.
Source: MEPS -
European Steel Review
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