[Steel Prices]EU Steel prices remain under negative pressure in July: MEPS

UNITED KINGDOM July 24 2015 9:16 AM

LONDON (Scrap Register): Aggressive offers from third country suppliers are driving down flat product domestic selling values in all EU nations, said MEPS International.

According ot MEPS, Iran has entered the market of late, as their export duties have recently been lowered. In general, market activity is reasonable, despite the slowdown ahead of the European summer holidays and reduced export sales volumes during Ramadan. However, little improvement is anticipated in the short term. Buyers anticipate further price reductions during the third quarter.

Basis figures in Germany have reduced for the second consecutive month. Imported Asian material is arriving into northern Europe and putting pressure on domestic producers to lower their selling values. The Greek crisis has added to the uncertainty in the market. Nevertheless, demand in the first half of the year was good, particularly from the automotive and construction sectors.

Prices have come under negative pressure in France this month. There is fierce competition from imports and between local distributors. Consequently, resale values remain low. Some buyers are cautiously re-ordering for their summer requirements. Nonetheless, end-user activity is subdued with many customers keeping inventories to a minimum.

In Italy, the situation at Ilva is still uncertain, despite the two blast furnaces remaining in operation. Third country suppliers continue to take advantage of this. Import pressure is very strong from all over the world, not just China and Russia. Nevertheless, market activity is generally good.

Prices in the UK have softened as a result of the stronger pound against the euro. Customers are continuing to use Chinese offers as a means of negotiating with local suppliers. Demand remains patchy but distributors are fairly busy and they are reporting reasonable returns.

In Belgium, domestic selling values have been eroded. Distributors are finding it difficult to make a profit as they are holding stock previously bought at higher prices. Purchasing activity is, on the whole, quiet but is better from the building and machine industries.

Spanish prices weakened in July, despite stable domestic sales volumes. The general election, due to take place towards the end of 2015, is likely to result in restricted government spending after the summer holidays. This could temper the growth in steel demand that has been recorded so far this year.