Tag Archives: steel prices

Steel Prices in the United States at Ten-Year High

The impact of 25 percent tariffs on imports of steel into the United States has been significantly eroded by the domestic mill price increases. Clearly, this situation would not have been anticipated at the beginning of the initiative.

The MEPS North American Average Flat Products selling figure increased by 34 percent, since the start of the year. In Western Europe, the steel price recovery, in US dollar terms, was just 3.5 percent over the same period. In Asia, an upturn of 6.5 percent was recorded.

How can the authorities in the United States square this circle? It is clear that, on a cost basis, domestic steel users will be in a position to return to purchasing from outside the country. This was not the original plan when the Section 232 plan was devised.

The answer will rest with the domestic steel producers. Overseas suppliers are likely to maintain their current offer prices. It will require action from the local steelmakers. This would, almost certainly, require them to adopt a different strategy to the one currently in place.

Source: MEPS International Steel Review

People also read:  Trade War Speculation Unsettles Emerging Steel Markets

EU Steel Prices Slip as Purchasing Slows

During June, the European steel market continued to be affected by rising global trade uncertainty. Steel buyers, particularly at the distributors, were, where possible, postponing their purchasing decisions. Moreover, political upheaval, in parts of the region, led to a lack of investment. As buying activity slowed, prices, for strip mill products, registered modest downward movements, in June. Meanwhile, contract negotiations with OEMs, for the second half of 2018, are ongoing, with producers looking for small price increases. Healthy underlying demand supports the proposed hikes, although a softening in raw material costs does not.

Germany

In May, a further slowdown in the pace of German manufacturing growth was recorded. Availability of standard grade strip mill products is good. Steelmakers are well booked into the third quarter. However, a number of buyers note that restrictions on the purchase of additional quantities have abated. Third country imports are rarely competitive. Producers are demanding increased prices, from contract customers, for the second half of 2018. The initiative has met with a degree of resistance. Meanwhile, recent spot market business was negotiated at slightly lower figures than a month ago. Service centres continue to cut their resale values in order to try to stimulate sales and reduce stock levels.

France

French demand for strip mill products continues to be supported by the auto industry. Mills in northern Europe are reporting full order books, with delivery lead times at fourteen weeks, in some instances. Basis values continued to decrease a little, in June. Activity slowed, in May, and the expected pickup has not yet materialised. However, according to distributors, sales volumes remain acceptable, although inventories are relatively high. Moreover, ongoing strikes are adversely affecting transportation.

Italy

Italy’s manufacturing sector continued to expand, in May, albeit at a slower rate than earlier in the year. Spot market prices are under negative pressure as a result of political upheaval, market uncertainty regarding the US Section 232 disruption and reduced purchasing by distributors. Further price falls cannot be ruled out. Underlying consumption is reasonable. However, customers believe that the downward price trend will continue, as a result of weak order intake at the mills.

United Kingdom

UK distributors report that sales activity is slowly recovering. However, their resale margins are still unsatisfactory. Independent service centres complain that mill-owned distributors are selling aggressively, thus lowering customers’ price expectations. Both the auto and construction industries continue to underperform. Basis values quoted by steelmakers are similar to those reported, in May.

Belgium

Small negative price changes were noted, in the Belgian market, in June. The economy is slowing, with growth forecasts revised downwards. Buyers are slow to make purchasing decisions. In general, distributors’ resale prices reflect replacement costs but margins are below recent norms. Service centre stocks are relatively low. Domestic mill quantities are limited. Import pressure is lacking. Overseas deals were on hold, in early June, as buyers awaited the outcome of the Section 232 measures.

Spain

Spanish manufacturing output growth eased downwards, in May. The steel market remains quiet, despite healthy underlying consumption. Expectations of lower prices, in the near future, led to a ‘wait and see’ attitude amongst buyers, especially at the service centres. Distributors reported reasonable sales, in May, but complain that June order books are shortening. Although current import offers are not particularly attractive, overseas material, booked earlier in the year, is now arriving, resulting in high inventories. Domestic price corrections were noted, for all strip mill product categories, this month.

Source: MEPS European Steel Review – June 2018

People also read: Divergent Stainless Steel Price Trends Derive From Section 232

Section 232 Action Creates Ripples Throughout Stainless Steel Markets

Divergent trends have emerged, in worldwide stainless steel markets, in the wake of the United States government’s Section 232 deliberations. Acting on the recommendations of the report arising from the investigation into the effect of foreign-produced steel on US national security, President Donald J. Trump announced a tariff of 25 percent, to be applied to all steel imports into the United States, effective from March 23.

American stainless steel producers and distributors alike acted swiftly, applying increases to their selling prices. While this can be seen as taking advantage of the rising cost of material from overseas competitors and a predicted tightness in the supply of stainless steel, it was hoped that this move would discourage panic buying and, to some extent, avert that shortage.

Agreements were soon made with many of the United States’ leading trade partners, granting them exemption from the immediate imposition of the Section 232 tariffs. However, in a number of instances, the action is merely delayed, pending further negotiations. Consequently, US customers and traders remain reluctant to place orders with suppliers from certain countries, for fear that tariffs could be re-imposed by the time material is delivered. In this environment, it should be possible for local sellers to maintain their elevated prices, in the near term.

In other regions, this development has raised the spectre of a glut of stainless steel, as some producers lose their current outlets in the United States. Market prices have weakened, accordingly.

In Europe, despite encouraging domestic sales volumes, in the early part of this year, and a perception of strong underlying demand, stainless steel flat product basis values slipped, in March. They could decline further, in April.

Producers in South Korea were unable to secure, in March, the increases that they thought were justified by earlier rises in raw material costs. LME nickel values are believed to have passed their peak, for the current cycle. Chinese stainless steel coil market prices have been sliding, in recent weeks.

Source: MEPS – Stainless Steel Review – March 2018 Issue

People also read: Further Uncertainty Created by Section 232 Exemptions

Medium Sections and Rebar Prices Rise in Northern Europe

Steel beam selling values increased, in Denmark, this month, buoyed by rising scrap costs. Consumption is satisfactory. Delivery lead times, from regional mills, are between four and six weeks. Private and public sector housebuilding activity is at a high level, in Sweden. Demand for apartments, for young people, is growing. A sharp, upward steel price hike, in Finland, was buoyed by increased scrap expenditure and healthy sales volumes. Beam selling figures were lifted, in late December, in the Netherlands. Further increments are expected. Construction activity is strong, in Norway. This helped to boost ex-mill values for sections, this month.

Rising scrap costs contributed to increasing rebar prices, in Denmark, in January. The mild winter, so far, has allowed infrastructure projects to proceed – resulting in healthy rebar consumption. The construction sector is busy, in Sweden, without serious disruption from the weather. Substantial rebar price hikes arose from strong demand and soaring scrap outlay. Sales picked up, in January, in Finland, following a seasonal slowdown, in December. Growing raw material expenditure, for the mills, supported increasing rebar values. Distributors succeeded in passing price hikes on to end-users. Material from Russian producers is cheap but offers from southern European mills are becoming less competitive. The Netherlands economy is booming – especially the housing sector. EU mills are busy. Turkish suppliers are present, in the market, but their offers are not attractive. Construction and infrastructure activity is at a high level, in Norway.

Source: European Steel Review Supplement – January 2018 Edition

MEPS EU Average Flat Product Prices Slip But Long Product Values Recover

Flat product prices continued to fall in the latter part of June, in both the north and south of Europe. Basis numbers were driven down by the impact of inventory build-up and price pressure from third country imports. Market sentiment began to change in early July, as competition from overseas material reduced. Foreign offer prices increased and the expectation of the introduction of antidumping duties, on hot rolled and hot dipped galvanised coil, during the summer, also led to fewer import transactions. An extended period of destocking is coming to an end. End-user consumption is at a high level and service centres are beginning to re-order for the autumn.

Reacting to this change in market direction, a number of Western European steelmakers are now pushing for price increases of around €20/30 per tonne on all strip mill products, for September deliveries.

European long product producers began to target price hikes of €15/30 per tonne, at the start of July, citing higher input costs. So far, the response from buyers is fair. At least a part of the increase is likely to be achieved. The mills are bullish and, in some instances, they are already pushing for further increases.

Source: MEPS – European Steel Review – July 2017 Issue

Divergent Prices in Global Stainless Steel Markets

Stainless steel flat products ex-mill prices decreased again, this month, in most of the countries surveyed by MEPS. Further reductions are likely, in Western nations, in the near term. Market participants in Europe and North America predict that July/August is likely to represent the bottom of the current price curve.

Transaction values fell sharply, this month, in the United States, under the influence of reduced raw material costs. While nickel values have stabilised, somewhat, in recent weeks, the decrease in the European ferrochrome contract price for the third quarter will affect stainless steel selling figures in the coming months. The US mills’ alloy surcharges for July, represent a further, significant cut, month-on-month. MEPS’ effective figure for grade 304, cold rolled coil, for June, is already over 5 percent lower than the recent peak value, recorded in April. However, it should be noted that this month’s price is more than 20 percent higher than that published one year ago.

Alloy surcharges continue to slide, in Europe. The recent weakness in the LME nickel cost had a negative effect on the calculations for June and July. The reduced ferrochrome contract figure is likely to result in more cuts for August. Furthermore, basis prices began to weaken, this month, and market players foresee additional discounts, in the short term. MEPS’ published transaction value for type 304, cold rolled coil, in Germany, for June, is more than 9 percent below the recent high figure, from April, but remains nearly 20 percent higher than the price recorded in June 2016.

Chinese price formulations react much more quickly to day-to-day fluctuations in raw material values, than those used in most other nations. Consequently, selling figures, in China, have risen, slightly, in recent weeks, in response to upturns in spot prices for both nickel and ferrochrome. Nevertheless, our tabled numbers, for grade 304, cold rolled coil, in June, are more than 23 percent down on the peak figure, published in December 2016, but 2 percent higher than the price reported twelve months ago.

Source: MEPS – Stainless Steel Review – June 2017 Issue