Flat product prices are generally stable this month, whilst producers are mulling some further rises for the July/September period. However, buyers are anticipating little change in the second half of the year. Third country price offers continue to stay at higher levels than those quoted at the start of 2007.
Demand is still good in Germany and business looks healthy going forward. Inventories at the service centres are reasonable. There is no lack of supply from either home or abroad. Third country imports, bought earlier in the year, are now arriving and we have reports that some European mills are delivering to customers ahead of schedule. Certainly, a number of producers now have ex-stock material for sale, suggesting that their order books may not be as robust as they were. The second quarter is now settled at the prices published in our April issue. Period three deals are unlikely to be discussed until the end of May at the earliest.
In France, real demand is holding up well amidst signs of recovery in the automotive sector. However, market activity this month has weakened slightly because of all the national holidays. Stocks are reported to be well balanced and third country import levels are subsiding, following increased penetration earlier in the year. The second trimester price rises are now fully implemented. Producers are said to be looking at further advances of €20/30 per tonne for period three but negotiations have not started yet and stockholders are quite doubtful they will be achieved.
Italian demand is still satisfactory with inventories in good order. There is more material available now from non-EU sources. After securing a number of significant increases in April, Riva has kept prices in a "no change" mode this month. Distributors report difficulties in boosting resale values as end-users are opposing the rises.
Although there is not a lot of steel available in the UK market, buyers are not rushing to place orders, despite reasonable consumption. Most companies have sufficient stock. Real demand is steady but service centre capacity is in surplus, causing negative pressure on resale prices. The domestic producer has indicated that the positive price trend will continue into period three. As the volumes of third country imports due to arrive in the middle of the year are relatively small, a rise could prove possible, despite the third trimester being a notoriously difficult quarter.
The Belgian market is enjoying good demand with healthy order books through to the holidays, although some market players have voiced concerns for business levels later in the year. Service centre sales are solid and it is now easier to recoup the mill hikes from their customers. Strip product values remain at the higher figures accepted in April. Buyers report large volumes of imports at the Antwerp quayside, mainly of Far East origin. The steel was ordered in January/February when prices were quite low but much of it is already sold.
Spanish customers are still reluctant to pay more for second quarter deliveries since inventories are at reasonable levels. Demand has slowed down somewhat. The private construction sector in particular is showing signs of deceleration. General industrial activity is satisfactory but unlikely to improve very much over the next few months due to local elections this year and a general election in 2008.