The past week has been characterized by contradictory trends and by a virtual stop of bookings.
From one side, the scrap price fall of 2 weeks ago was giving to buyers reasons to expect a significant drop of the prices of all products. On the other side the scares availability and the deteriorated exchange rate of the EUR against USD was helping to keep quotations and offers at same or even higher levels than one week ago.
Long products that were expected to suffer most from scrap fall have, on the contrary, performed decently well with prices remaining basically on same levels and going slightly down only for orders of important quantities.
Therefore merchant bars, I and UPN as well as H beams have kept the positions also because stock levels are not high at all as some of the main EU distributors cannot find enough materials for deliveries in May or early June.
In a different situation are de bars where market is definitely disappeared after that, during the last two months, certain euphoria of transactions and stock piling was going on due to price increases. Many debars producers have already tried and still strongly trying the way of export, trying to take profit of EUR weakness. Actual offer Fob stowed seems to be around EUR 485 per tonne effective from Italy and about EUR 475 per tonne FOB stowed effective from Spain. Turkey seems to be even at a lower level around EUR 460 per tonne FOB ST effective.
Similar to long products, except debars, flat products have also basically kept same price levels and positions although customers are extremely conservative and careful about new bookings. Many of them have been able to take profit of the recent price increases, making profits that possibly are putting in safe the budget of the entire 2010 and thus nobody is available to risk even the smallest percentage, as the memory 2009 disaster is still close and burning.
It is seen that prices of flat products in Europe are sliding down, not heavily but going down. As per market information, during last days quite many distressed lots have been offered in Italy and Spain, mainly from Ukraine but customers are quite reluctant to book as expecting prices to further go down. On the other hand, domestic producers are keeping prices quite high.
However at the same time the weakness of the EUR against the USD has made offers from China and India even more expensive than before, leaving to only Russian and Ukrainian Mills the task to serve the import markets. But the main Russian mills are apparently fully booked till June while Ukrainian Mills, as very well known, can serve only the low level quality part of the market.
Thus, from a fear of a drop similar to the one of June 2008, it seems that situation is regaining a better feeling. Some Turkish Mills have restarted to buy scrap. If next week all of them will recover the usual purchase standard, we might assist to a new round of generalized price increases.