It is reported that steel price are going down in EU due to different sentiments and scarce availability.
While domestic EU main Mills are keeping prices basically untouched and some of them are even thinking to new increases by beginning of June, offered prices from abroad are falling down, but extreme weakness of Euro is maintaining the same at levels not affordable by many EU buyers.
The difference between North and South Europe is deepening as Germany and surrounding countries are continuing to enjoy a quite good situation with buyers available to pay demanded prices, while Italy and Spain are falling into a period of stagnation with basically no import and few bookings of low priced materials.
Everybody seems to be waiting, convinced that bottom has not yet reached and that further decrease are at door before the new wave of purchases that is expected between end of May and beginning of June.
It seems that billets are also loosing ground day by day with offers of Russian and Ukrainian producers being already below the USD 500 per tonne FOB and expected soon at USD 450 per tonne.
Italian and Spanish producers of merchant bars are trying to take profit of the situation, giving discounts only for orders of important quantities.
A different scenario is, on the contrary, that of de bars producers both in Italy and Spain. The huge difference between the installed production capacity and the actual consumption that is 3:1 million tonne in Italy and even more in Spain, is leading to difficult and drastic decisions for the sector that without a major re shuffling, production cutting, closing down and margins will not be able to sustain the situation for still long time.
It is seen that steel prices are going down more and more on all products.
Ukrainian HRC is offered at prices ranging USD 630 per tonne to USD 640 per tonne CFR FO Mediterranean ports without any buyer available to book.
HRP is also following the same trend with customers looking for prices lower than EUR 550 per tonne. However other more quality Mills are still looking for much higher prices, still close to EUR 600 per tonne or minimum EUR 560 per tonne.
Pig iron is again decreased and now a days if offered at USD 480 per tonne to USD 485 per tonne CFRFO Mediterranean ports.
In any case all buyers have inserted the back gear and no one is available for the time being to book any quantity as the consolidated sentiment is that prices are bound to further decrease. Most of the buyers are on hold and waiting for the last week of May or first one of June to come back in the market and negotiate new tonnages for August September shipment.
Most probably this move will keep a negative price trend with a possible improvement only after the above mentioned new purchase shift.
Our opinion is that following variable will determine the trend of the second part of the year:
1. New round of negotiation of iron price due to settle 3rd quarter price
2. The real level of stocks that is said to be not that high and in need of a quick re feeling
3. Chinese and Indian domestic market situation, eventually pushing for higher export business
4. The capacity of the EU governments to tackle the present general economic crisis by injecting capitals enough to make the big infrastructures business to restart in short time.
Hopefully the conjunction of all above variable will give a positive result, however the "man is still sick and not able to stand up"