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Home > MEPS Steel News - 20.09.2017

EU 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 accordingly.

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 longer attractive.

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.

MEPS - European Steel Review - September 2017 Issue

Also See: MEPS All Products Composite Purchasing Price & Index


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