Steel Purchases Remain at High Levels, in Advance of Covid-19 Measures

21st April 2020

Purchases of flat steel products continued at a high level, during March, despite measures to combat the spread of the Covid-19 virus. Northern European distributors and service centres reported strong sales. Many customers are believed to have ordered more material than usual, in order to ensure supplyPurchasing activity, however, began to decrease, in early April. Demand from the automotive sector has been particularly poor.

Strong demand for flat products

Domestic demand for hot rolled coil, in the Netherlands, was strong, as customers favoured local distributors. Selling values were further supported by healthy order books at regional mills. Purchase tonnages of cold rolled coil and hot rolled plate were also high, but plate sales decreased in early April. Supply of coated coil is tight.

Sales tonnages, in Austria, were boosted by demand from customers who usually buy from Italian suppliers. Demand from the automotive sector is at a very low level. Manufacturers are, in some instances, hampered by a shortage of imported components.

Weakening currency in Sweden and Norway increased local prices, although transaction values were largely unchanged, in euro terms. In Norway, the shipbuilding industry is likely to be hit, in the future, by the effects of the coronavirus, through diminished demand for cruise liners.

Import offers are attractive, at present, but buyers are contemplating the likelihood of reduced prices from European mills. Supply from Asia may be affected, in the coming months, by reduced availability of shipping containers.

Supply of long products disrupted by forced mill closures

Many Nordic buyers of wire rod prefer to deal with local producers, as supply from southern European mills is insecure. Availability of reinforcing bar was inconsistent but limited deliveries, from southern Europe, continued.

Supply flows, of medium sections and beams, were disrupted, as many customers buy from Spanish mills – several of which were closed, at least temporarily. Deliveries of merchant bar, from several European mills, were irregular. Nevertheless, merchant bar selling values increased, driven by the intermittent supply from regional mills.

Vehicle manufacturers suspended production, and sales of long products to the automotive sector were poor. Meanwhile, construction and road building schemes have restarted, in Austria.

Source:

European Steel Review Supplement

The MEPS European Steel Review Supplement is the sister publication of the MEPS European Steel Review, offering insight into European carbon steel prices.

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