Demand continues to remain slow, and the steel producers continue to mumble about price increases:
Strip mill market values in several West European countries slipped during the summer and look as if they may continue to drift for some products. Producers are expected to try for some small improvements over the next few weeks as negotiations are concluded for fourth quarter delivery. There are no huge stocks in the supply chain and third country material at the dockside is lacking. However, raw material costs are no longer soaring which may deflect recent mill augments for price increases.
In Germany, market values fell during the July/August period. Much of the negative pressure was caused by Italian suppliers who were keen to book business before the vacation. Both Thyssen and ArcelorMittal are proposing higher figures for period four deliveries. However, customers are questioning whether present demand can support the initiatives, especially in an environment where raw material expenditure and freight rates are declining. Although new offers from third country sources are few, there will be material arriving soon that was purchased comparatively cheaply. This could compel the European mills to offer concessions.
French demand has improved a little since the beginning of September. A number of distributors are placing new business because stocks are low and prices may rise in October. Negotiations are in progress, with the steelmakers looking to implement a €30 per tonne rise. Producers say order books are filling up even if basis figures have not been agreed yet.
Confidence is returning to the Italian market. There are definite expectations that the final trimester will be better than the earlier part of the year. Prices are showing some small improvements compared to late July when basis numbers fell further because local mills aligned down to import levels. Third country suppliers are now jacking up their offers by at least €20/30 per tonne, leading to predictions of similar movements in domestic values.
UK service centres report that there is so little demand from end-users that they have been forced to cut resale values quite dramatically. Activity has been very quiet through the summer. A lack of orders in late July led to significant mill price reductions during August. Market participants are expecting a brief restocking phase this month. However, many companies have learnt to survive with much smaller quantities of material than was the case historically.
The Belgian market is not particularly busy as customers wait to see whether the mills will implement their fourth quarter price proposals. Third country imports were booked before the holidays, relatively cheaply. This material, which is due to arrive in ports during October and November, could threaten price stability. There are few new overseas offers at present.
End-user consumption is slow in Spain, with only a small number of deals being concluded during August. Some cautious restocking is now underway at the distributors, where inventories had become very depleted. The mills conceded discounts over the summer but the price pressure on both imports and domestically produced material is now upwards.