IMPORTS DRIVE EU STEEL PRICES DOWNWARDS IN SEPTEMBER – MEPS
Despite strengthening demand in
a number of west European countries, flat product domestic selling
values are being negatively influenced by the availability of very
low-priced third country import offers. Cheaper raw material and
energy costs are contributing to the situation. Market sources are
quite pessimistic about the coming months. As a result, buyers
expect further price reductions.
In Germany, the auto sector continues to perform well but has slowed
a little, as a result of a fall in sales to China, brought about by
currency exchange rate changes. The construction industry is also
slowing as the winter season approaches. Service centre stocks are
quite full after the holidays. However, end-users are only taking
what they need for immediate use, as they anticipate even lower
prices in the future. Consequently, resale values are under
The French market was muted at the beginning of September. Activity
was expected to pick up, slightly, towards the end of the month, due
to restocking. Market participants foresee their order books at
similar levels to those in previous months. They believe that the
difficult situation in China and other regions represent a threat.
Producers have tried to resist negative price pressure with mixed
The Italian steel market has deteriorated over the summer, leading
to feelings of insecurity amongst buyers and sellers alike, despite
signs of some small recovery in the general economic situation.
Cheap imported material is the major disruptive factor. On the
demand side, the auto sector is performing well, thanks to
investment in new models. The mechanical engineering segment saw
some improvements at the start of the summer. Service centres report
that their sales volumes are positive, compared with earlier in the
year, but resale prices are poor. Competition in that sector is
In the UK, distributors report that demand has remained good but
that their buying prices have fallen, for the fourth quarter. Resale
values have moved down, slowly and steadily, in tandem with mill
figures. Service centre inventories are low relative to demand.
Traders’ stocks at the docks are also depleted as caution prevails.
Prices remain on a slow, downward trend in Belgium. Turkish and
Chinese imports are available. Even if customers do not purchase
this cheap material, because of the long delivery lead time
involved, they use the low figures in negotiations with their
European suppliers in order to obtain discounts. Companies do not
need to build stocks as steel can be acquired very quickly.
A massive increase in the availability of cheap third country
imports occurred in the Spanish market during the summer. This has
led to a series of domestic basis price reductions for November
rollings of all flat products. As there is still a large
differential between local and foreign figures, buyers expect
further discounting for December. Underlying demand is reasonable.
There has been a sharp impact on distributors’ resale values since
July. Margins have been squeezed.
Source: MEPS -
European Steel Review
- September 2015 Issue
MEPS - EU Steel
up for free MEPS steel news alerts