Home / Metal News / Copper / Weak market conditions keep EU average Steel prices stable: MEPS
Weak market conditions keep EU average Steel prices stable: MEPS
Oct 27,2014 09:11CST
industry news
Source:SMM
European flat steel products purchasing activity has been slow over the last month. Consumption in mainland Europe is stagnating, MEPS International in a snippet.
UNITED KINGDOM October 24 2014 3:32 PM
 
LONDON (Scrap Register): European flat steel products purchasing activity has been slow over the last month. Consumption in mainland Europe is stagnating, MEPS International in a snippet.
 
According to MEPS, most fourth quarter deals have now been concluded at the levels prevailing in the third trimester. Producers have been unable to implement their proposed increases due to lacklustre demand and the declining costs of inputs such as scrap, iron ore and coking coal. On the other hand, the strong US dollar is keeping third country imports at bay and supply from Italy is restricted. 
 
German market sentiment is poor at present due to concerns about a recent drop in industrial production. End-users are cautious. They are only purchasing for their immediate needs. Competition in the stockholding sector is tough. Overall, demand is stable but not at a high level. 
 
The French market is quiet with modest demand. Participants are concerned that the situation is static. End-users still have short order books and are fighting for the small amount of business available. Ex-mill flat product prices have generally been stable over the last month, whilst distributors’ resale values have deteriorated. However, there is a feeling that steelmakers may try to lift prices in the first quarter next year. The current euro/US dollar exchange rate is keeping third country imports at a normal level, said MEPS.
 
As the recession in the Italian economy continues to bite, steel producers are still attempting to impose basis rises. They were, briefly, successful in late September but, since then, prices have dropped back to the level reported in our last issue. The initiative was sparked by a fluctuation in the exchange rate when the euro weakened against the dollar. This was expected to make imported material less attractive. However, Chinese prices were unchanged, despite the currency movements. There is no pressure from Turkish supply, which is currently too expensive. A lack of demand is widespread across all consuming sectors. There are fears that prices may weaken further.
 
UK service centres report brisk sales in October, with many being even busier than in the previous month. However, resale values are being slightly negatively affected by a degree of destocking at some companies and, reportedly, aggressive selling by Tata’s distribution outlets. Otherwise, they are fairly steady. Stockholders’ buying prices remain the same as a month ago. The proposed rise was not implemented as there was no support from raw material costs. Inventories remain on the low side because of a lack of confidence in future price movements. 
 
There have been no real changes in either basis figures or activity levels in the Belgian market. The economic situation is poor, so steel demand is slow as many end-users have depleted order books. Service centres are battling for every sale, even over small quantities. Their margins are very low. There are few third country import offers and prices are not attractive.
 
The Spanish economy is slowly getting back on track with more government investment promised for 2015. However, any success in ramping up steel prices was shortlived because of slack demand. It was thought that a fluctuation in the exchange rate would help sustain a rise but this was not the case. Basis numbers remain firm. Third country offers are very close to European figures. A number of distributors report slightly improved sales volumes but activity is inconsistent. Many customers are purchasing on a weekly basis.
 
EU Steel Prices
MEPS

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news