Flat Product Steel Prices Rise in September, Further Increases
Expected in October
Underlying steel consumption remains robust, in
Germany, according to the September issue of MEPS European Steel
Review. Both the auto and construction companies require large
quantities of steel. The volume of flat products standing at the
ports has reduced significantly. New offers from overseas suppliers
became increasingly more expensive during the summer. The domestic
price trend reversed in late July. Local producers took advantage of
the lack of competition from imports by hiking basis values
French prices have been rising since the end of July/beginning of
August. This month, distributors need to refill their stocks. They
are also trying to buy ahead of anticipated further price increases.
Buyers report extending delivery lead times for most products.
Activity by end-users is quite good as their order books have been
improving. Service centres inform MEPS of a slight upturn in,
year-on-year sales, for August and early September. With raw
material costs on the rise, plus a recovery in demand, producers are
pushing for further hikes, this month. Imports, generally, are no
In Italy, domestic suppliers applied significant pressure in order
to lift prices. The differential between Italian and northern
European figures is reducing. Local mills are now proposing further
increases, for new orders. The market has been geared to rely on a
large proportion of imported material for many years. Now, overseas
price offers are escalating and the quantities available are
shrinking. Domestic delivery lead times became longer during the
summer. Moreover, demand, from several sectors, has strengthened.
Nevertheless, service centre inventories remain relatively high.
This is reflected in poor resale margins.
Although UK manufacturing output accelerated in August, EU suppliers
note a decline in recent transactions as bloated inventories are
gradually consumed. Moreover, third country material, ordered
earlier at attractive prices, continues to arrive. New overseas
offers are now much less competitive. Port stocks reduced
substantially during the summer. The lack of imports, plus higher
raw material costs, enabled steelmakers to introduce an increase in
basis values for the fourth trimester. Distributors report
reasonable business levels. Resale margins have contracted but
profitability is acceptable.
The Belgian market is healthy. Steel demand is good. With lower
inventories at both end-users and distributors, customers now need
to restock. No major import volumes are noted. Conditions were in
place for a price rise initiative, which was successfully
implemented, in September, supported by higher production outlay at
the mills. However, the inflated prices are proving problematic for
a number of companies working on projects that were negotiated when
the cost of steel was much below current levels.
High stocks in the Spanish market allowed many buyers to postpone
purchasing decisions for November/December business. Substantial
quantities of material were ordered prior to the holidays, at prices
well below current market levels. However, a lack of import
pressure, now that third country quotations have escalated, should
help domestic suppliers to consolidate their new offers. By
mid-September, positive price movements were detected for late
September/October deliveries. Underlying demand is good. Resale
values are catching up with mill increases.
Source: MEPS -
European Steel Review
- September 2017 Issue
All Products Composite Purchasing Price & Index
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