|
|
EU steel prices continue to rise - more increases expected
By Jamie Milnes, MEPS
May 22, 2008
EU prices continue to increase. The mills are insisting that they must go up again in period three to reflect the rising costs of production. The initiatives are likely to be accepted due to a lack of any competitively priced alternatives. Import volumes into Europe remain very low and this is contributing to already limited availability from local steelmakers. The soaring prices are clearly not driven by demand, which is relatively modest. Inventories, generally, are not growing because it is too costly to finance steel stocks.
The
German mills are talking of hefty price rises on strip mill products in the third quarter. Service centre inventories of commodity grade coil are adequate with some buyers refusing to place further orders at present. However, availability of the higher specifications appears to be more constrained and some gaps are appearing. Real demand is no better than "normal". The strong Euro continues to have a negative effect on exports of manufactured goods.
In
France, sales of coil are described as "average", although some improvement is noted in the automotive sector, as one of France’s two major car manufacturers is ordering extra material on top of its usual annual requirements. Producers are said to be considering a basis rise of at least EUR 100 per tonne. Under current market conditions, prices are not open for negotiation so buyers are placing business not knowing the final cost. They complain that they cannot get enough tonnage.
Italian values have continued to move up, albeit at a slower pace, despite fairly flat underlying consumption. Now that the new government is in place, customers feel that public investment could grow in the longer-term but no immediate improvement is expected. Import pressure is modest, leaving buyers with little or no alternative but to accept higher prices from local producers who are using inflated raw material costs to justify their demands. Suppliers are talking of further hikes next month.
UK consumption is far from robust. Even the auto sector is softening. Nevertheless, steel selling values for the remainder of period two continue to move up as availability is poor. Traders’ stocks are shrinking rapidly as it becomes increasingly difficult to secure new supplies. Service centre inventories are also depleted because they cannot afford to build them up, partly due to limitations on credit. Shortages are beginning to occur. Some distributors are struggling to recoup the mill increases from end-users.
In
Belgium, the manufacturing and construction sectors are performing well. Inventories are low at the consumers because of the high costs of finance. Service centre stocks are described as "reasonable but not excessive" with holes appearing for certain grades/sizes. So far, distributors are recovering the higher prices they are paying the mills.
Spanish demand is stagnant at best and expected to decline further because of the generally poor economic situation. Meanwhile, prices continue on an upward trend, amidst a lack of credit availability. Customers are only buying what they need and are keeping inventories to a minimum.
 MEPS (international) ltd. is a leading independent supplier of steel market information.
For more information please visit MEPS website.
In addition, make sure to read these articles:
Steel price downturn extending into all developing countries
North American average stainless steel prices - latest forecasts
Input cost deflation not improving stainless steel mill demand
November 2008 global steel price falls 15 percent
Imbalances in supply and demand send eu steel prices into free fall
Asian average carbon steel prices - latest forecasts
Global steel prices in free fall - further reductions anticipated
Upturn in stainless steel market expected early next year
EU steel prices collapse as credit crisis bites
North American average carbon steel prices - latest forecasts
|
 top of page
back
Tell a friend
print
read times
© 2008 GRIPS media GmbH All rights reserved. Reproduction in whole or in part without permission is prohibited.
|
|
 All external sites will open in a new browser.
GRIPS media does not endorse external sites.
|
|
