NORTH EUROPEAN STEEL PRICES UNDER PRESSURE FROM ALL SIDES

Demand for steel products typically drops away during the fourth quarter as end-users and stockists attempt to minimise their inventories for the year-end. Purchasing activity has been further depressed, this year, by the uncertainty caused by the current economic and financial difficulties, particularly around the eurozone. Falling values for raw materials are applying further negative pressure to steel prices.

Transaction values for hot and cold rolled coil have slipped in November. Customers are buying only for their immediate needs and leaving their orders as late as possible. This often means purchasing from service centres, even though delivery lead times from the mills are very short. There is little competition from third country imports as the price differentials are minimal.

Sales of coated sheet and coil have reduced as car makers have decreased their output. However, the auto sector remains quite healthy, compared with many others. Inventory levels throughout the supply chain are relatively low so participants may increase their buying activity soon.

High specification hot rolled plate continues to sell in good volumes. Major consumers in the Nordic region, such as paper, energy, offshore and shipbuilding, are performing well. The same is not true of many users of commodity grade plates. Prices for these items have fallen substantially.

Long products prices have changed little this month but the situation could not be described as stable. While there is still some building activity in Scandinavia, government infrastructure spending has been cut in most countries. Some producers have said they will seek higher selling figures in the near term but there does not seem to be the demand to support this move. Indeed, with iron ore and scrap values decreasing, the next price movement is likely to be downward.

Source: European Steel Review Supplement  
Also See: MEPS Nordic Index and  MEPS Nordic Steel Prices