North European steel prices continue strong gains: MEPS

LONDON (Scrap Monster): The MEPS Nordic Average Strip Mill Price continues to climb strongly in February. Purchasing activity improved as a result of inventory replenishment and speculative buying, according to a report by MEPS International.

Moreover, many market participants reported slightly better end-user demand than they had anticipated – at least for the immediate future. The mills are seeking further substantial price hikes next month but they are likely to meet some resistance from buyers.

There remain shortages of some hot rolled coil items and cold rolling capacity in mainland Europe is sold out until the end of the first quarter of 2012. However, customers cannot see orders far beyond that point. The strong US dollar has made third country imports unattractive of late but, now, offers of Asian material will limit the extent of price increases for locally produced steel.

Commodity plate values have grown less than those for strip mill products, although the market for higher quality plates has been stronger. Demand from oil and offshore applications continues to be robust but heavy truck manufacturers have revised their forecasts downward.

The MEPS Nordic Average Long Products Price increased again this month, aided by increasing scrap values until mid-January and the delayed onset of winter weather. However, scrap costs have softened in recent weeks and freezing conditions have slowed construction activity. Further additions to long products selling figures will be more difficult to achieve in March.