Tag Archives: producers

STEEL PRICES UNDER NEGATIVE PRESSURE IN NORTHERN EUROPE – MEPS INTERNATIONAL LTD

MEPS research reveals that strip mill product selling values have decreased, across the Nordic region, in euro terms, during July. Consequently, mill profit margins have been squeezed. Demand for hot rolled coil remained stable at a low level. The producers’ European Steel Supplementsales volumes are expected to pick up, after the summer break. Overcapacity persisted in the cold rolled coil market. Competition between the distribution businesses of SSAB and Rautaruukki continued to keep prices under negative pressure, before the details of their merger were finalised. Sales of galvanised material to the automotive sector remain fair. Demand is expected to remain steady throughout the summer and market participants are hopeful of an upturn thereafter.

Sales tonnages, for commodity plate, were steady in Denmark and Sweden as suppliers attempted to maximise orders in advance of the slowdown during the holiday period. Market sentiment was less positive in Finland. As a whole, prices were unaltered across northern Europe.

Structural section selling figures decreased, in euro terms, despite strong consumption in some countries. Activity in the Swedish rebar market was robust as several major projects were in progress. On the other hand, there was little infrastructure investment in other countries researched. As a result, ex-mill prices were lower, month on month. There is expectation that public spending will increase in the near future. Transaction values, for merchant bar, decreased in July. Demand from the manufacturing sector was at a good level in Sweden. However, we noted a seasonal slowdown in business activity in other Scandinavian countries.

Source – MEPS European Steel Review Supplement – July 2014 Edition

EU STEEL MARKET PRICES CONTINUE TO WEAKEN AHEAD OF THE HOLIDAYS – MEPS INTERNATIONAL LTD

Activity in the European flat products market is quiet ahead of the summer holidays, according to MEPS research. Although consumption is strengthening in several countries and economic indicators are good, producers, keen to book orders, have agreed to further small price reductions. Customers have called for lower basis values, citing the mills’ relatively low raw material costs and the availability of cheaper third country imports.European Steel Review

As the domestic auto sector is busy, German steelmakers have strong order books from those companies. However, other industrial sectors are only performing at a level comparable to last year. Distributors are reducing resale values in order to compete for business. Buyers are of the opinion that further minor weakness could develop over the next six to eight weeks.

Activity remains weak in the French market, where end-users have short order books and are worried about the situation in September. They are, therefore, unwilling to order material now. There will only be a slight increase in orders for September delivery because underlying consumption is poor. As a result, basis values have eroded further, despite mills’ efforts to stabilise them

Market sentiment in the Italian steel sector is very negative. After the Italian mills decided to drop basis values to encourage orders, buyers report that their quotations are now being met by some North European producers. End-users are worried about their stock levels as all hopes of demand improvement, forecast earlier in the year, have been dashed.

UK service centres report they have a wide range of busy customers. Distributors’ sales volumes are well up on 2013 and, for some, the best in several years. Nevertheless, mill prices remain low. Indeed, they have continued to drift downwards, due to the strength of sterling, which is serving to attract material from mainland Europe and further afield.

There have been no major changes in the Belgian market, where demand is flat. Distributors report that end-users are endlessly shopping around to get bigger discounts. Stockholders from neighbouring countries are also competing for business. Delivery lead times from the steelmakers are extremely short.

There are signals that the Spanish economy is slowly reviving. New projects are coming on stream and some of those that were postponed during the financial crisis are being reactivated. It could be well into the final quarter before this improvement makes itself felt in the domestic steel industry, which, currently, is quite dull. Suppliers are, therefore, looking continually to export markets.

Source – MEPS European Steel Review – July Edition