NORTHERN EUROPEAN STEEL PRICES RISE DESPITE ONGOING WEAK DEMAND – MEPS

Producers in the Nordic region and others supplying northern Europe have pushed through significant hikes in flat steel prices and are hoping to achieve more, despite scant evidence of any uplift in end-user demand. While there have been some positive signs from customers in mainland Europe, markets in the north are still being held back by the wintry conditions.

The mills point out that scrap prices have escalated, due to a relative scarcity of supply and strong demand from buyers in Asia. There will also be the effect of forthcoming leaps in contract prices for iron ore and coking coal. Furthermore, the producers have been selling at unprofitable figures for a long period during the current economic downturn and they are keen to reverse the situation.

However, these higher prices will not be sustainable without a solid increase in end-user consumption and the steelmakers may regret their recent decisions to relight a number of blast furnaces.

The situation has been more drastic in the long products market, which habitually reacts more directly and more quickly to raw material costs.

Transaction values had increased only moderately by the beginning of March and changes to formal scrap surcharges were minimal. However, as the month progressed, producers were driven by soaring raw material costs to withdraw, briefly, from the market while they formulated significant hikes to their list prices.

Source: European Steel Review Supplement - EU STEEL PRICES