EU STEEL BUYERS HOLD OFF MILLS’ ATTEMPTS TO LIFT PRICES IN JANUARY -
Many German buyers feel that
there are no supporting arguments to justify the proposed flat
product basis rise, given the mills’ lower raw material and energy
expenditure. Moreover, despite the fact that there are few
attractive third country import offers, due to developments in the
euro/dollar exchange rate, supply is still in excess of demand. The
majority of first quarter business has already been finalised at the
The French market remained quiet in early January, following the
long Christmas/New Year break. It was still too early to measure the
true level of activity. Some end-users partially filled their order
requirements before the holiday, while others did not.
MEPS has noted no significant changes in flat product basis values
in the Italian market, where most companies did not return from the
holidays until January 7, at the earliest. At this stage, it is
difficult for the steel producers to judge the true level of demand,
particularly with the uncertainty surrounding the oil price and the
continually dropping value of the euro.
UK buyers are dubious about the successful implementation of the
first quarter increase proposed by ArcelorMittal, since they have
received much cheaper offers from Nordic suppliers. The exchange
rate is making Chinese quotations unworkable at present. Service
centres had good sales in December and January has also started
well. Overall, both mill and resale values are holding up.
The situation in Belgium is virtually unchanged from December 2014.
The market is described as “sleeping”. With raw material costs low,
as well as demand, buyers question why steel prices should go up. A
number of service centres placed orders just before Christmas and,
therefore, are not in any particular hurry to conclude new deals.
Resale business is very competitive. Third country imports are
virtually non-existent as the euro is weak against the US dollar.
Basis figures have hardly changed in Spain. Buyers explain that,
although they are aware of ArcelorMittal’s desire to lift prices,
other suppliers have not yet made their intentions known. The
general opinion is that the announcement will, at least, halt the
downwards tendency that was prevalent in December 2014. Real
consumption is stable. However, distributors report that resale
values are under renewed pressure.
European Steel Review
- January Issue
MEPS - EU Steel
up for free MEPS steel news alerts