Prices for European flat products fell in February for the fifth month in a row. In addition, customers lack clarity regarding steel imports, especially with regard to certain EU protective measures and their potential impact on the market. Regional plants have free capacity due to a significant reduction in orders from car manufacturers. Stocks, especially in service centers, remain adequate to current requirements, which allows customers to wait and evaluate how the market is developing.
However, a number of factors can bring a new dimension to future pricing. Price increases have been proposed for mill products, with immediate effect. Import quotes from third-country suppliers are also higher than a month ago. Mining costs at the mine are rising rapidly after the dam collapses at the Brazilian iron ore producer Vale. The floods in Queensland, Australia, which led to the temporary closure of the coking coal export terminal at Abbot Point, have increased spending.
Conditions in the manufacturing sector in Germany deteriorated in early 2019. Trading tensions and a slowdown in the automotive sector undermined steel demand. Receipt of orders from metallurgists remains weak. Prices for rolled strip continued to decline in February. Stocks in service centers are medium to high. Their sales are below expectations. Buyers on the lookout - order only according to their immediate requirements. Offers from foreign sources are more expensive than a month ago.
In France, distributors report good activity, but resale prices remain under negative pressure. Procurement volumes from the automotive industry were better than expected, after a slowdown in the market in the last two months of 2018. However, in February, tape factories continued to make price concessions. In connection with the rise in prices for raw materials, as well as the entry into force of new final quotas of the EU, some buyers believe that conditions are currently more favorable for price increases.
Production in India fell sharply in January. The downward market has become extremely weak. As a result, the demand for flat products and prices are suffering. Delivery times from local mills are very short. Despite the proposed increase, baseline values ??continued to decline in late January / early February. Since stocks in service centers remain high, MEPS discovers that they have little reason to buy large volumes. Resale fields continue to shrink.
Manufacturing activity in the UK slowed down in January. The former baseline values ??in February remained almost unchanged. European plants announced their intention to raise prices in the second quarter, but some deals for April / May have already been concluded at current levels. Foreign suppliers also increase their quotes. Nevertheless, the prices of port traders are quite reasonable. Stocks in auto service centers are relatively high due to the slowdown in the automotive industry. Distributors' margins are tougher than recently, but still acceptable.
In Belgium, economic growth is lower than previously expected. Some major investment decisions have been postponed. In the steel market, both end users and shareholders are on standby and watched, as uncertainty persists. In February, there was a further decline in prices for rolled strip. A number of buyers believe that the bottom has already been reached, since the EU has announced new duties on certain types of imports.
A positive start to 2019 was recorded in the Spanish manufacturing sector. Meanwhile, buyers began to insist on discounts, and local manufacturers adjust the base values ??downward for shipments in March. However, customers do not expect further decline. They expect that metallurgists will receive at least part of their proposal to raise the price at 30 euros per ton. Sales of service centers in February increased in volume. However, resale values ??do not reflect replacement costs. Distributors hope that the planned price increase for the mill will help them recover lost profits.
