Northern European Steel Prices Close To Bottom

Northern European Steel Prices Close To Bottom

Steel market activity in northern Europe is still very weak and there is no sign of an upturn in demand in the near term. Ex-mill selling values dropped again in November. Stockists and end-users remain reluctant to carry any more inventory than is absolutely necessary. However, prices are believed to be close to the bottom of the current cycle. Indeed, several mills have proposed increased basis figures.

Order tonnages have decreased in recent weeks in most countries in the region. Delivery lead times for strip mill products are short. Wholesalers and service centers have low inventory levels. Some customers are fixing deals for shipments in the first quarter of 2013 - suggesting that they anticipate rising prices. The MEPS Nordic Average Transaction Price for cold rolled coil decreased by 3.4 percent, this month.
Hot rolled plate prices remain under downward pressure but are thought to be close to bottoming out. Selling figures for commodity grade plates have dropped more than those for strip mill products. The MEPS Nordic Average Transaction Price for hot rolled commercial grade plate dropped by nearly 4 percent, in November. Higher specification plates are under less negative price pressure.

Transaction values for long products have fallen less dramatically than those for flat products. A recent upturn in scrap costs reduced the drop in prices for structural steels. There are a number of ongoing infrastructure and construction projects but demand, generally, is poor. Some rollings have been postponed owing to a lack of orders. Delivery lead times for certain items have, therefore, stretched. Steelmakers from Eastern Europe continue to offer material at competitive figures.
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