Steel Producers Look to Secure Volumes But Faced With Fluctuating Demand In Northern Europe

Steel Producers Look to Secure Volumes But Faced With Fluctuating Demand In Northern Europe

Demand for flat products, in northern Europe, varies by country and by end-use. Selling values, in mainland Europe, continued on the downward trend that began last month. In the Nordic countries, while many prices have been maintained, they are expected to decrease, in the near term. Third country offers are, for the most part, unattractive.

Industrial activity is, generally, stronger in Scandinavia than in the rest of Europe, although Norwegian consumption is a little subdued. Demand for hot rolled coil, in Denmark, from the building industry, is fair. The local economy in Sweden is healthy and delivery lead times from the domestic supplier, SSAB, are stretching. Order activity is weak, in Finland, with selling values unchanged, but under negative pressure. In the Netherlands, regional steelmakers are offering discounts, in an effort to compete with imports and secure market share. In Austria, availability is good and delivery lead times are short.

The Danish hot rolled plate market is relatively quiet and stockists’ margins are being squeezed. Demand is satisfactory, in Sweden and in Finland, but quite slow, in Norway. In the Netherlands, consumption is subdued, and availability is good. Machinery manufacturing is weaker than it was in 2018, in Austria.

Regional producers of cold rolled coil are offering very competitive selling figures, in the Netherlands, in an attempt to secure orders. Inventories are quite high, in Austria. Demand is slowing. In Norway, purchasing activity subsided, in early May, following a busy April. In Denmark, sales, to the offshore oil and gas sector, are good. Swedish domestic industries continue to prosper but a downturn is forecast. Mill order books are moderate, in Finland.

The Danish market for coated sheet and coil is subdued. Sales, in Sweden, Finland and Norway, continue to be adversely affected by the depressed automotive sector. Orders from manufacturers are decreasing, in Austria. No upturn is foreseen, in the near term.

Wire rod purchasing activity is stable, in Sweden. In Finland, demand from the automotive supply chain is weak. Low-priced offers are available, from southern Europe. The local market is quite strong, in the Netherlands, but customers in neighbouring countries are less busy. Ex-mill transaction values decreased in Denmark and in Austria. Most Norwegian domestic prices were unchanged.

Sales volumes of medium sections and beams are satisfactory, in Denmark, but regional mills have spare rolling capacity. In Sweden, the housebuilding and commercial construction industries are busy. Extremely short delivery lead times, in Finland, suggest that demand is weak. Sales are healthy in the Netherlands. Domestic construction activity is good, in Austria and Norway.

Suppliers of reinforcing bars, reluctantly, cut prices, in the Netherlands, amid patchy market conditions. Buyers, however, continue to seek new, competitive sources of material. The Danish market is steady. Sales for construction and infrastructure projects are good, in Finland and in Sweden. In Austria, local sales activity is at a high level. Norwegian domestic consumption is reasonably strong.

Merchant bar purchase tonnages are steady, in Denmark. Prices, however, decreased, in line with wider European markets. Swedish industrial activity remains healthy, but a slowdown is forecast. Sales to the manufacturing sector are good, in Finland. Domestic demand is reasonable, in the Netherlands. Offers from southern European suppliers are very competitive. Regional mills are making very attractive quotations, in a bid to secure order tonnages.

Source: MEPS European Steel Review Supplement

Nordic Steel Price Forecast

MEPS forecasts that Nordic average flat product prices will decline, in the short term. A number of factors are likely to exert downward pressure on transaction values. Demand from the automotive industry, a key steel-consuming sector, remains weak, as a result of new vehicle emissions testing procedures and softening consumer confidence. Steel purchasing volumes are reasonable in the Nordic countries. However, economic and political uncertainty across Europe is having a negative impact on sentiment in local markets. Furthermore, price weakness in other Western European nations is adversely affecting selling figures, in the Nordic region.

A price recovery is forecast, in late summer/early autumn. Steel mill profit margins are increasingly being squeezed. Iron ore prices have risen substantially since the Vale dam disaster, in late January. Furthermore, coking coal costs remain elevated. Consequently, the imperative for steelmakers to lift transaction values is becoming more acute.

Source: MEPS European Steel Review Supplement