NORTHERN EUROPEAN STEEL PRICES SHOW MODEST UPWARD TREND – MEPS

The Flat Products market got off to a slow start to 2010 in Northern Europe. Some suppliers report increasing numbers of enquiries and even sales, although this activity is perceived to be due to restocking rather than growing real demand. Some products, though, such as pickled and oiled hot rolled coil, galvanised and thin pre-painted material are in greater demand or tighter supply.

The mills’ attempts to increase prices were met with little enthusiasm by buyers. While rising raw material costs should have an inflationary effect on steel selling values, the extent of such movement will be determined by the strength of end-user demand.

The situation for Long Products looks a little more positive. Several market participants reported improved wire rod sales, although this was not immediately reflected in selling figures. However, price hikes due to increased scrap costs were accepted quite easily for several other products. This was despite the severe winter weather limiting demand from some construction applications.

ArcelorMittal suspended its scrap surcharge mechanism for medium sections and beams, in a move, it said, to reduce price volatility. Nevertheless, raw material costs were the driving force behind higher transaction values for this product in January.

The major European producers continue to operate at less than their full production capacities. As this constrains supplies to the market and stretches delivery leadtimes, any growth in real demand should lead quickly to rising prices.

Source: European Steel Review Supplement - EU STEEL PRICES