Prices continue to go down on all products and all origins and destinations across Europe last week reflecting real conditions in steel market and consuming segments.
All customers are basically looking only for prompt delivery lots, avoiding committing on long term delivery orders.
As the holiday season of end of the year is approaching, customers are not willing to book orders now for delivery January''2011 but only for material that can eventually reach their warehouses before Xmas.
This is clearly witnessed by the huge import purchases made during 3rd quarter of 2010 with the consequent price increase. Unfortunately, based on such promising result, all Mills were deciding to push up the production which was translating into a sharp misbalance between offer and demand. Thus, starting from mid of September prices were starting to loose progressively ground in a negative trend that we expect will not end soon.
The main topic is that the consumption continues to be sluggish and prices are driven more by external factors such as the exchange rate between EUR and USD rather than by market fundamentals. All EUR denominate prices offered from abroad to EU, by suppliers having USD accountancy, have seen a drastic reduction as a consequence of
1. EU Mills decision to suddenly dumping prices in order to refill their October order book that, till then, was basically empty
2. EUR appreciation, 6% to 7% since beginning of September 2010
Particularly HRC have shown a price decrease of EUR 40 per tonne to EUR 60 per tonne from EUR 530 per tonne to EUR 540 per tonne of beginning of September to present EUR 480 per tonne and even EUR 460 per tonne in case of Ukrainian stock lots.
Since then EU domestic Mills have followed same path, running behind any available order with prices progressively going down. However, at the same time import has been quite strong as, specifically for HRC, has reached same record peaks of 2008.
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