NO PICKUP IN NORTH
EUROPEAN STEEL DEMAND - PRICES SLIP AGAIN - MEPS
Steel sales volumes failed
to increase in March and April, in northern Europe. Consequently,
transaction values slipped once again, in many countries, leaving
profit margins for producers and distributors at a bare minimum.
Although there have been some strong economic indicators in recent
months, leading to optimistic forecasts, actual demand for steel has
yet to pick up.
While demand for strip mill products is perceived to be improving in
some countries, the market across Europe is subdued. Producers
achieved some short term price advances in recent weeks but these
were short lived. Mill input costs decreased during February and
March and local prices were placed under further pressure by cheap
import offers from Asia. MEPS Nordic Average transaction prices for
hot rolled and cold rolled coil edged downwards in April.
Hot rolled plate values slipped again, this month, and remain under
negative pressure. Prices continue to be affected by competition
from Russia and Eastern Europe. Steel market participants perceive
no sign of the economic growth suggested by government statistics.
Buyers and sellers do not foresee a substantial pickup in demand or
transaction values in the next six months.
The mild winter in northern Europe kept demand from the construction
sector relatively steady, the seasonal pickup in spring is,
consequently, less pronounced. In fact, purchase volumes for long
products have been disappointing and selling values have dropped.
Distributors are buying beams imported from South Korea in order to
reduce their costs. This is having a negative effect on local market
prices. Selling figures for rebar, agreed this month, have been
lower than during March, due to earlier decreases in scrap costs.
However, values for the raw material have increased in recent weeks.
If this trend is maintained, prices could rise, in due course.
Economic activity in Scandinavia is better than in much of Europe.
Even so, merchant bar prices have been dragged down by the market in
the rest of the continent.
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