EU STEEL COIL PRODUCERS FACE HIGHER INPUT COSTS AS DEMAND COLLAPSES
Market sentiment has been knocked by the recent economic turmoil and sovereign debt issues in the eurozone. Strip mill product prices are fairly flat this month. Domestic producers are still keen to lift basis values significantly for the third quarter. However, most steel consumers and distributors are comfortable with their current inventory levels and are purchasing prudently. Consequently, the market is very quiet and the number of mill bookings is extremely low. The steelmakers may eventually be forced to go below their target selling figures to generate business, at least for the commodity grades. It may be easier to secure increases for the higher specifications. In recent days, the mills appear to be acknowledging the overall weakness in the market. They are said to be considering output cuts during the third quarter.
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Expect cut backs in production as the European steelmakers try to protect price levels