Seasonal Reduction In
Activity Negates The Impact Of Capacity Cuts
Western and northern European producers idled several blast furnaces
in recent months, thereby reducing supply in the regional market.
Nevertheless, amidst subdued demand and seasonal factors, such as
year-end inventory minimisation, few buyers were receptive to the
mills’ proposed price increases for strip mill products. In fact, in
most of the countries surveyed, transaction values, for flat
products, continued to decrease, slightly, in December.
The unresolved future of the Ilva plant, in Taranto, Italy, is
leading to reduced supply of hot rolled coil in central Europe.
Market participants in Austria, consequently, foresee the
possibility of price increases. Underlying demand is weak, in
Denmark. In Sweden, end-user activity is declining, from its
previous, very satisfactory state. In Finland, demand is poor and
alternative suppliers are making competitive offers, in an attempt
to gain market share. Distributors and service centres are beginning
restocking programmes, in the Netherlands. Delivery lead times, from
European mills, are shortening, in Norway.
Hot rolled plate prices continue to slide, in Denmark. Inventory
levels are high. In Sweden, sales volumes are expected to fall
significantly, in 2020. Russian mills are offering material at
substantially less than local market figures, in Finland. In the
Netherlands, the agricultural equipment sector is depressed, while
shipbuilding activity is stable, at a low level. A wide range of
prices, from regional producers, is reported, in Austria. Sales
volumes decreased, recently, in Norway.
Cold rolled coil inventories, in the automotive supply chain, are
declining in Denmark. Import offers are similar to local figures
and, therefore, not attractive. In Sweden, reduced contract prices
are predicted, for the first quarter of 2020. Purchase tonnages are
fair, in Finland. Buyers, in the Netherlands, consider recently
announced price hikes to be excessive. Austrian service centres are
trying to minimise their stock levels. Order quantities are
depressed, in Norway.
Sales volumes of coated sheet and coil are adversely affected, in
most of the territories surveyed, by reduced automotive production
in neighbouring countries. No early upturn is forecast, in 2020.
Austrian buyers report that decreased supply from the Ilva plant, in
Italy, may contribute to inflationary pressure on regional prices.
Drawing quality wire rod suppliers secured small price increases, in
Sweden. Rising scrap costs influenced the change. In Finland,
automotive activity is subdued but overall sales volumes are
satisfactory. In all the other countries surveyed, selling values
Most regional producers of medium sections and beams filled their
order books for December rollings. Increasing transaction values, in
most countries, were influenced by a combination of tightening
supply, stretching delivery lead times and growing mill input costs.
In Austria, beam producers tried to lift their selling figures,
without success. In Norway, prices, initially, fell, but,
subsequently, rose above previous levels.
The expected exhaustion of the EC safeguarding quota, for Russian
reinforcing bar, could buoy local prices. Growing delivery lead
times and supply shortfalls are reported, in Finland. Danish prices
picked up but the positive trend may be limited by seasonal, low
activity. Swedish end-users are placing orders for small quantities
only. Construction and infrastructure work is limited, in the
Netherlands. Scrap costs recorded a steady increase, in Austria, but
demand is insufficient to lift rebar values at the same rate.
Merchant bar values in Denmark were, mostly, unchanged, in December.
Sellers, in Sweden, were unable to secure price increases. Finnish
OEMs are reasonably busy. The domestic market, in the Netherlands,
has been quite stable, in recent weeks. Prices, in Austria, remain
unchanged. In Norway, some deals were reported at increased values,
but most were agreed at rollover prices.
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