Category Archives: UK Steel Prices

EU Steel Prices Steady in May Despite Anxiety in Global Market

The European steel market continues to be affected by rising uncertainty. Trade with non-EU countries is considered a risk because of the possibility of sanctions being applied for material already contracted. Moreover, steel buyers, where possible, are postponing their purchasing decisions while they consider the potential outcome of the USA’s Section 232 legislation and the EC safeguard investigation. Consequently, as buying activity slowed, prices either stabilised or, particularly in the south of Europe, registered modest downward movements, in May. Underlying demand remains healthy, supported by favourable economic conditions.

The German manufacturing sector made a robust start to the second quarter, with output rising substantially. Mill order intake is healthy as end-users are, finally, forced into placing orders. However, in the distribution sector, sales activity slowed, in May. Recent strip mill business was negotiated at figures similar to last month’s values. Service centres are cutting their resale prices, often quite significantly, in order to try to stimulate sales. Import offers are not competitive.

French basis values were generally unchanged, in May. Buyers expect this stability to continue, despite the steelmakers’ attempts to obtain further rises. A number of distributors are satisfied with sales volumes, but others report a noticeable slowdown. Nonetheless, demand from the construction and auto industries remains healthy. The high number of public holidays and extended weekends, in the month of May, reduced the amount of business but activity is expected to recover, in June. Meanwhile, planned industrial unrest, resulting in strike action through to June, plus a shortage of available transport, is complicating delivery logistics.

The recent slowdown in growth in the Italian manufacturing sector continued during April. Steel buyers successfully negotiated discounts from the producers, during May settlements. This was, partly, a reaction to reduced import pricing. However, overseas offers are now becoming more expensive due to changes in the euro/US dollar exchange rate. Downstream customers are less busy and service centres have enough stock to allow them to postpone purchasing decisions.

At the start of the second quarter, UK manufacturing output continued to grow, albeit at a reduced rate. Distributors report that sales activity is slowly picking up. However, they still struggle to pass on mill increases, to their customers. A number of stockists note slightly improved resale prices, as cheaper inventories are now diminished. Both the auto and construction industries are underperforming. Basis values quoted by steelmakers, for third quarter delivery, are slightly lower than those reported in April.

No major price changes were noted in the Belgian market, in May. Service centres state that producers are unwilling to offer reductions prior to the summer holidays. Distributors only place orders for what they need each month. In the majority of cases, they can now incorporate the mill increases in their resale values to end-users. Deliveries from the domestic steelmakers are running late. Import pressure is lacking. Deals appear to be on hold as buyers await the outcome of the Section 232 measures.

The rate of expansion in manufacturing output increased in Spain, in April. Currently, the steel market is rather quiet, despite good underlying consumption. Expectations for lower prices, in the near future, have led to a ‘wait and see’ attitude amongst customers. Service centre inventories, although modest, are at a sufficient level to enable buyers to postpone placing new orders for large quantities. Quotations from overseas suppliers, with the exception of those for cold rolled coil, are unattractive. Domestic price corrections were noted for all strip mill categories, this month. Distributors failed to fully recoup recent mill hikes from their customers.

Source: MEPS – European Steel Review (May Edition)

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UK STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

Hot rolled coil figures, in the UK, are under negative pressure, according to MEPS. Delivery lead times are relatively short. There is strong import competition from Turkey.

Commodity plate figures have weakened, since September. Third country offers are placing pressure on domestic selling figures. Customers are reluctant to purchase Chinese plate because of its high chromium content. Distributors note that, overall, day-to-day sales volumes remain poor. Consumption by the mining, oil and gas industries has declined considerably.

Coated coil transaction values are down since September. The vehicle sector is healthy, although Land Rover and Jaguar’s order books have dropped because of reduced exports to China. Distributors are busy with sales to the building industry.

Prices for low carbon wire rod dipped over the last four weeks. The high carbon grades are holding up better. Mesh quality selling values have fallen due to lower scrap prices. Sales to the building sector are healthy.

Demand for structural sections, in September, was quieter than many distributors envisaged. Resale prices continue to slide, ahead of perceived mill decreases as stockholders try to move inventories. There is overcapacity in this sector. Negative pressure exists due to the availability of cheap raw materials.

Rebar demand is fairly stable at a good level. The issue is one of oversupply. Chinese material, ordered earlier in 2015, is still arriving. However, the appetite for forward orders, despite ever reducing price offers, has diminished because of the ongoing anti-dumping investigation.

The negative pressure on merchant bar selling values persists, despite reasonable demand, which has not really changed since 2014. The downward price trend is creating problems for distributors because of the continual devaluation of their stocks. The main import threat is mainly from European sources.

Source: MEPS – European Steel Review – October 2015 Issue

UK STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

UK commodity plate prices are still higher than those in most of mainland Europe, according to MEPS. This is attracting imports, aided by the strength of sterling. Resale values are still under pressure. The lack of investment in the oil industry means sales to that sector have plummeted. Construction demand has held up but selling figures have been damaged by the availability of cheap Chinese material.

Buyers report that Russian suppliers of cold rolled coil have reduced their offers. Domestic basis number have weakened slightly from the reduced level established in April. Customers consider the bottom has been reached for coated coil transaction values. There are fewer, cheap Chinese offers. The vehicle sector is healthy and distributors are busy with sales to the building industry.

Prices for structural sections have tumbled as order intake has slowed. The weak euro has given mainland European suppliers significant advantages. The environment for distributors is increasingly challenging as lower ex-mill values have led to stock losses. Even so, there appears to be no resolve on their part to push resale values up. The larger players are selling at particularly low numbers. April was quieter than expected but there should be plenty of activity in the future.

UK rebar prices for forward orders are at a similar level to last month. Despite healthy underlying demand, the domestic producer has little possibility of lifting values at the moment. There is severe import pressure, mainly from Chinese sources but also from mainland European suppliers taking advantage of the current exchange rate. There is plenty of material sitting at the docks and service centre stocks are considered to be a little on the high side.

Some price erosion was noted for merchant bar, during the latter part of April, but, since then, things have stabilised. Service centre stocks are reasonable. There are plenty of offers from mainland Europe due to the weak euro.

Source: MEPS – European Steel Review – May Issue