Although, steel prices in Europe are continuing to go up amid tight availability, buyer’s sentiment is changing from positive to doubtful and they are reported to be adopting a very conservative stance in last few days.
Because of consumption and demand remaining quite low, all distributors are puzzled about future trend as they cannot recharge the successive price increases to their customers.
Local EU Mills are apparently not taking in serious consideration these signals and keep announcing and implementing price increase at any given opportunity. Some of them like Riva of Italy have simply suspended offering in view of enjoying better prices and keep availability scarce.
All in all, the situation looks quite odd as the EU market is apparently combining tight availability with a low demand and rising prices, which is definitely a situation not affordable in the medium term. On the other hand costs of raw materials and semis are pushing hard from bottom, preventing mills from releasing the pressure on prices.
In this frame we are assisting to some timid but nevertheless significant attempts of sales from China, from the first time since months. Some major Chinese trading houses are offering HRC at around EUR 550 per tonne CFR FO, CR strips at around EUR 600 per tonne to EUR 610 per tonne CFR FO and HRP at about EUR 570 per tonne CFR FO for base. These are prices at which customers will most probably not be available to buy, also because shipment is June and thus availability for sale will only be for September onwards.
However levels are round about present quotations from CIS and Ukraine or even much better as in the case of CRC strips, which is significant of a possible change from China. If this new behavior will be confirmed in the days to come, we might assist to a sudden turn around of price trend with consequences difficult to assess.
All above is not generally applied to all EU territory but mainly to south EU and particularly to Italy that, traditionally, is the most speculative and sensitive market as the most penetrated from import. Others like Spain and Germany are still apparently following the positive trend of the last weeks without signs, for the time being, of changing mind and mood.
We reckon that from now by the end of April, this period of time will be the one determinant for understanding rest of the year trend.