October 08, 2008
EU flat steel products price upturn after summer holiday- MEPS
MEPS reported that activity is slowly returning to the EU market after the dormant summer holiday period as the quantities of imported strip mill products arriving in Southern Europe dropped during August 2007. MEPS said that “EU customers are expecting import price offers to be higher during the autumn because of an anticipated decline in availability from China and a need to recover escalating raw material costs. Nevertheless, some local prices have slipped during the vacation. EU producers still appear undecided regarding period four pricing and no official announcements have been made so far.”
MEPS said that “Although real consumption remains healthy in Germany, demand on the mills has lost some momentum because of overfull inventories at the distributors. Resale values for strip products are much lower than 5 to 6 weeks ago. As many service centres have sufficient stocks for the next 2 months at least, it is difficult to envisage any increases being secured by the mills for October to December2007.”
MEPS added that “Demand has started to pick up in the French market since the beginning of September 2007.” It added that in Italy, the price falls of early summer have been arrested and producers are starting to look for some small increases. However, competition at the distribution level is quite strong as the destocking process continues and service centres will find it difficult to pass on any mill rises to their customers. Some improvement in activity is anticipated during October 2007.
MEPS said that “The price trend in Belgium appears to be a negative one. Plenty of material is standing in Antwerp port, some of it rusting outside because the warehouses are full. This is partly as a result of insufficient de coiling capacity. Spanish buyers do not want to risk imports at present and are only purchasing small lots from the local mills.”
MEPS also noted that the UK market has been quiet since mid July 2007. Order intake is described as steady but not exciting. Buyers are concerned about the fourth quarter but, so far, there have been no mill announcements. Domestic prices softened over the summer as producers tried to create business during the holidays. However, import values from Asia are now moving up.
