Northern Europe Steel prices soften on slow summer: MEPS
LONDON (Scrap Monster): Sales volumes for strip mill products in northern Europe are disappointing at present, after an encouraging start to the year, said MEPS International in a briefing. Industrial activity in the Nordic countries, though, is holding up better than in the rest of the continent. Spot values throughout the region are starting to slide.
Quarterly prices will decrease for period three but they are likely to remain higher than they were at the beginning of the year. Selling figures are expected to be relatively stable through the quiet summer season but any substantial upturn in activity should quickly lead to price increases, MEPS added.
According to MEPS, the prices for hot rolled plate are largely unchanged, so far, but transaction values for heavy plates, in particular, are under downward pressure. Demand from yellow goods and truck manufacturers remains reasonable but there are few government projects. Customers are buying only for their immediate needs. Market participants report that suppliers from Japan and South Korea are selling aggressively due to weak demand in their own region. Quotes from Eastern Europe will have a deflationary effect on prices.
Delivery lead times for long products are short, except where mills are forced to delay or cancel rollings due to lack of order coverage. Demand is poor and there is little capital investment. Most prices dropped in May despite scrap costs moving in the opposite direction.
Leading producers have announced hikes of around €30 per tonne to size extras for merchant bars. However, MEPS has no reports of buyers paying the new figures or intending to do so in the near future.
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