German Steel distributors still struggle with low resale prices: MEPS

GERMANY June 26 2015 3:15 PMTweet

BERLIN: (Scrap Register): Many German hot rolled coil customers, especially the service centres, are asking for discounts on selling figures, according to MEPS. Distributors are still struggling with low resale prices because of overcapacity in that sector. The quantities of Russian material have reduced but there is more competition from Brazilian mills.

Hot rolled plate distributors are competing fiercely for business as they continue to try to reduce their overblown stocks, ahead of the summer vacation. Meanwhile, cold rolled coil domestic basis numbers have fallen, marginally. Demand for auto sheet remains good and sales to the general market are satisfactory. However, distributors are struggling to make decent margins.

There are competitively-priced third country galvanised coil import offers in the thinner gauges. Domestic figures have declined. The auto sector continues to perform well but the carmakers will still try to negotiate price cuts for second half, 2015 contracts, citing the mills’ lower outlay on raw materials. Construction-related demand has not really recovered during the spring.

During recent negotiations for sales of low carbon wire rod, German producers have maintained the modest rise they secured in May. Recoil values are unmoved this month. Buying activity is weak.

Activity in the structural sections market has not fully recovered, where steelmakers have failed to secure the proposed hike. There is strong competition for the business available. rebar customers are purchasing only minimum requirements. Consequently, demand is slow. The small advance, implemented last month, remains in place.