UNITED KINGDOM June 23 2015 11:32 AMTweet
LONDON (Scrap Register): Overall demand for flat products is reasonable in Western Europe, according to MEPS International.

Buyers are anticipating the arrival of large quantities of third country material during the summer, particularly at ports in the south, said MEPS in a report.

Following concerns about the increasing impact of imports on the EU steel market, the European Commission has initiated an anti-dumping investigation into cold rolled coil imports from China and Russia. Negotiations have started between the domestic mills and the auto companies for second half 2015 contracts. Producers would like a roll-over of the first half prices but the carmakers are expected to ask for lower values because the steelmakers' input costs are down.

Demand is holding up in Germany with business in the first six months described as acceptable, with auto leading the way. Forecasts suggest that building activity may be down slightly in the second half. Buyers are receiving new offers from third country sources but many consider the price benefits to be too small when compared to the long delivery lead times. However, they are aware that large volumes are already on the way. There is plenty of material quickly available from domestic sources.

Activity on the French market is still weak in major consuming sectors, such as construction and energy, whereas the auto industry is faring satisfactorily. Competition between distributors is fierce. As a result, a number of warehouses have closed down. Ex-mill basis values have remained relatively stable since last month. There is some pressure from overseas suppliers, which has left domestic producers struggling to maintain selling figures. Import quantities have climbed since the start of the year.

Although internal demand remains depressed in Italy, there are small signs of recovery, mainly in the auto sector, so far. Domestic basis values have deteriorated further, driven down by poor sales, high levels of availability and increasingly aggressive offers from China and India. Considerable volumes have been booked for arrival during the summer holidays. As a result, buyers do not expect prices to recover during 2015. Competition in the distribution sector is severe, with service centres so hungry for business that they concede discounts on a daily basis.

Consumption is said to be reasonable in the UK, with the manufacturing sector fairly busy. Service centre sales have been healthy. Stocks are well balanced with demand. Producers are willing to be flexible during negotiations and prices are down, a little. Resale values have declined in tandem with the ex-mill figures.

Belgian service centres are keeping inventories low because they can obtain material quickly from local mills, who, in some instances, are carrying stock. End-users are only purchasing what they need for immediate use. Imports are available from China and Russia.

Underlying consumption is slowly improving in Spain, where domestic basis numbers are unchanged from May. However, the market is slow. The summer vacation period is approaching and large quantities of pre-booked, foreign material are still to arrive.