NORTH EUROPEAN STEEL PRICES LIKELY TO PICK UP IN THE NEW YEAR

Demand for steel is weak in most Nordic countries. The usual seasonal minimisation of inventories, in preparation for the year-end, has been exacerbated by caution arising from the wider economic situation. Most flat products prices were still falling for deals done in early December.

Despite a number of European blast furnaces and rolling mills being idled, there is plenty of hot and cold rolled coil available and delivery lead times are short. However, distributors and end-users will look to rebuild their stock levels during the first quarter of 2012. As most of the producers are scheduled to take extended breaks for the Christmas and New Year holidays, supply will become tighter. This is expected to put upward pressure on transaction values.

Consumption of coated sheet and coil in the region has been driven in recent times by the supply chains serving the Swedish and German car manufacturers. Their steel requirements have eased of late. Selling figures have slipped, in line with those for the other strip mill products.

Orders from the main end-users of hot rolled plate have continued at a reasonable rate. Demand for higher specification grades, in particular, is good. Activity levels and investment remain high in many of the region’s big industries, such as oil and offshore applications, pulp and paper production, yellow goods and truck manufacturing. Consequently, plate prices have decreased very little, if at all.

The picture for long products is mixed. Demand from the construction sector has been good in Scandinavia, where there has been no severe weather, as yet. Sales to manufacturers, on the other hand, have been subject to the same economic factors as those for other products. Most producers have announced their intention to charge higher basis prices for deliveries from January onwards. Although there had been few reports of deals at increased values in the first part of December, we expect some advances early in the new year.

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