STEEL PRICES RISE IN EU
FLAT PRODUCTS MARKET DESPITE SUBDUED DEMAND - MEPS
The European flat products market was slow to
resume after the extended Christmas/New Year celebrations, according
to a recent report by MEPS (International) Ltd. Prior to the
holiday, on December 14, ArcelorMittal announced a further rise of
€20 per tonne, following the limited success of its November, €40
per tonne, initiative. Although the mills continue to push for
increases, customers remain sceptical that any significant advance
will prove possible, given the current, poor state of demand. The
hikes are being driven by the steelmakers’ needs to restore
profitability in a climate of high raw material costs. Most import
offers remain uncompetitive.
Inventories are relatively low at German service centres and some
stock replenishment is expected during the first quarter, which
should help the mills to realise some of their price hike proposals.
Many companies had still not completely finalised their period one
price negotiations in early January. The demand outlook for this
year is not very optimistic.
In France, end-user activity continues to be weak. It is too early
to confirm any improvement in apparent demand from distributors.
Meanwhile, producers continue to apply the price rises they had
started to implement at the end of last year. Import volumes remain
low as buyers refuse to commit to long delivery lead times.
Negotiations with the auto industry have been finalised, with first
half figures agreed at around €50/60 per tonne lower than in the
second half of 2012.
In Italy, the Ilva plant at Taranto has been given permission to
ship coil, following several weeks of disruption and the situation
is slowly getting back to normal. Economic conditions are dire and
service centres report that steel demand is shrinking on a weekly
basis. The domestic mills have pushed through small increases during
recent settlements but these are driven purely by higher input
costs. There has been some import activity, mainly before Christmas,
because of fears of shortages caused by the Ilva situation but,
overall, overseas offers are not particularly attractive.
Suppliers to the UK market are outwardly sticking to their price
hike proposals but are still hungry for orders. Business conducted
in late December was at previous levels. Activity was slow at the
start of the New Year. Any price increases would kick in later in to
the first quarter.
Many Spanish buyers are staying out of the market in early January
in order to see whether the steelmakers can maintain their price
levels. Demand has not improved to support higher basis numbers.
However, third country importers have significantly inflated their
quotations, on shipments for arrival April onwards, due to soaring
raw material costs.
Source: MEPS -
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