SLOW DEMAND LEADS TO
SOFTENING STEEL PRICES IN NORTHERN EUROPE – MEPS
Steel purchasing activity
has declined in northern Europe after a promising start to 2014.
Inventory replenishment and speculation contributed to the increased
volumes bought in the early part of the year. Now, though, it
transpires that underlying demand has not picked up in the manner
that had been foreseen. Producers have proposed basis value hikes
for some items in recent weeks but market price trends have been
flat or negative, dependent on country and product.
There has been no seasonal pickup in demand for strip mill products.
Overcapacity persists in steelmaking and distribution. Furthermore,
imported material, especially from Asia, is being offered at very
competitive figures. As a result, the mills have failed to achieve
price advances and, in some countries, small decreases in selling
values have been recorded. Stockists, unless they are desperate for
cash, are holding onto material, hoping for higher prices in the
Distributors report substantial tonnages of hot rolled plate of
Asian origin arriving in Europe. In the Nordic region, transaction
values have also come under pressure from lower-priced imports from
Russia and Eastern Europe. Although demand has been reasonable from
some sectors and some locations, the trend in selling values across
northern Europe has been downward, during the past month.
The tendency for long products prices has been distinctly negative
in recent weeks. The market for drawing quality wire rod remains
subdued and selling figures have slipped, a little. Demand for
structural sections is expected to increase this year but, for now,
mills are reducing their offer prices, influenced by lower scrap
costs and the need to fill their rolling schedules. Despite mild
weather and demand from some large infrastructure projects,
consumption of reinforcing bars is disappointing and transaction
values have decreased for the second month, in most countries. The
reported growth in manufacturing activity in much of Europe has had
little noticeable effect on consumption of merchant bar and prices
fell, all over the north of the continent, in March.
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