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GERMAN LONG PRODUCT STEEL PRICE RECOVERY
IS FORECAST
MEPS International Ltd predicts an upturn in German wire rod prices
in the first and second quarters of 2012. Selling figures have
increased by approximately 3 percent since December and it is
anticipated that suppliers will lift them further in the first
trimester.
Medium sections transaction values are expected to increase by
around €60 per tonne over the next six months. A rise of €20 has
been secured in Germany in the last month. Consumption is better
than anticipated because construction site work has been able to
continue longer into the winter than usual. Moreover, government
spending on infrastructure has been stepped up.
Rebar selling figures have firmed by over 7 percent in January,
month on month. Unseasonably high temperatures have enabled building
activity to continue without a break. Consequently, fabricators need
to replenish inventories that they had allowed to decrease.
Producers are now pushing for further advances in market selling
values.
MEPS has noted some upward price pressure for merchant bar. Although
the full €30 per tonne rise, planned by the producers, has not been
fully implemented, values have risen by €10 since MEPS December
figures were published. The overall supply/demand situation is
improving due to extensive production cuts over the holiday period.
Reduced output levels, combined with rising input costs should
assist German producers to successfully implement at least part of
their proposed increases in the first half of the year. Re-stocking
by customers throughout the supply chain is also likely to help
boost mill demand and lift transaction values in the short term.
Source: MEPS - European
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