Measures Unsettle EU Steel Market
European buyers of strip mill products were purchasing cautiously,
in July, due to the uncertainty linked to trade disputes, political
upheaval in several countries and proposed mergers within the
industry itself. They were also waiting for clarification regarding
the European Commission’s safeguarding investigation. The probe is
aimed at preventing steel shipments being redirected to the EU
market, as a result of the United States’ imposition of import
tariffs under Section 232.
On July 18, the EC announced that provisional safeguard measures
will be implemented, covering twenty-three steel product categories.
A 25 percent tariff will be imposed above a set quota, based on the
average import volumes over the past three years.
During July, a degree of price divergence, between the north and
south of Europe, was noted. In Italy, local mills successfully
reversed the recent negative price trend. In the remainder of the
region, basis values remained stable, with slight negative pressure,
as steelmakers accepted a rollover, or marginally lower figures, for
September deliveries. However, the producers are pushing strongly
for a fourth quarter price hike. MEPS noted some initial resistance
to this initiative, particularly from service centres, due to their
inability to fully pass on previous increases, to their customers.
Nevertheless, the lack of competitively priced third country
imports, plus relatively strong underlying demand in most countries,
should put regional mills in a strong position. A price recovery is
expected to be accepted during negotiations in late July. At that
time, customers will need to book tonnages, in order to replenish
stocks after the summer vacation.
Source: MEPS -
European Steel Review
- July 2018 Issue
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