UNITED KINGDOM January 22 2015 10:31 AM
LONDON (Scrap Register): Many German buyers feel that there are no supporting arguments to justify the proposed flat product basis rise, given the mills’ lower raw material and energy expenditure, said MEPS International in a snippet.
Moreover, despite the fact that there are few attractive third country import offers, due to developments in the euro/dollar exchange rate, supply is still in excess of demand. The majority of first quarter business has already been finalised at the old levels.
The French market remained quiet in early January, following the long Christmas/New Year break. It was still too early to measure the true level of activity. Some end-users partially filled their order requirements before the holiday, while others did not.
MEPS has noted no significant changes in flat product basis values in the Italian market, where most companies did not return from the holidays until January 7, at the earliest. At this stage, it is difficult for the steel producers to judge the true level of demand, particularly with the uncertainty surrounding the oil price and the continually dropping value of the euro.
UK buyers are dubious about the successful implementation of the first quarter increase proposed by ArcelorMittal, since they have received much cheaper offers from Nordic suppliers. The exchange rate is making Chinese quotations unworkable at present. Service centres had good sales in December and January has also started well. Overall, both mill and resale values are holding up.
The situation in Belgium is virtually unchanged from December 2014. The market is described as “sleeping”. With raw material costs low, as well as demand, buyers question why steel prices should go up. A number of service centres placed orders just before Christmas and, therefore, are not in any particular hurry to conclude new deals. Resale business is very competitive. Third country imports are virtually non-existent as the euro is weak against the US dollar.
Basis figures have hardly changed in Spain. Buyers explain that, although they are aware of ArcelorMittal’s desire to lift prices, other suppliers have not yet made their intentions known. The general opinion is that the announcement will, at least, halt the downwards tendency that was prevalent in December 2014. Real consumption is stable. However, distributors report that resale values are under renewed pressure.