LONDON (Scrap Monster): There is a great deal of uncertainty in the flat products market in Europe, said MEPS International in a snippet.
Despite price rise announcements by the leading domestic mills, customers have been unwilling to pay any more. Already patchy demand is steadily decreasing as the holiday period approaches. Customers are only buying what they need, refusing to build up their stocks. Any hikes are unlikely to be implemented until the autumn at the earliest. The mills will need to make further output reductions to achieve them, they added.
In Germany, business is becoming quiet for seasonal reasons with prices barely changed from June. ArcelorMittal has tried to lift them but without success. Order placement in July and August will be on the low side but may go up in September when inventories need to be replenished.
Activity in France is described as “average but certainly not a disaster”. Consumers are generating a little demand, even though they have short order books. Nevertheless, distributors’ resale values remain low. Both end-users and service centres continue to wait until the last moment to place orders.
The dramatic slowdown in the Italian economy has resulted in a lack of steel demand, with suppliers complaining that enquiries are virtually nil. Service centres are only purchasing if it is absolutely necessary, whilst end-users refuse to carry stock and demand deliveries at the last moment.
Despite announcing a basis rise, Tata Steel has not succeeded in enforcing an increase in the UK, so far. Demand on the mills is slow with only small volume orders being placed. Stockholders report that their sales volumes are reasonable but that, particularly on commodity items, resale values are poor with very little margin to be made. Their inventories have been kept very low and some now need to place orders.
Spanish ex-mill basis numbers remain low and some further erosion has been noted in July. Demand has not improved, with few enquiries either on the steelmakers or the service centres. Because of the dire financial situation, consumers are pushing hard for discounts, resulting in even lower resale prices, MEPS concluded.
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