EU steel prices finished 31% higher in 2010 compared to 2009 and MEPS, the UK-based steel consultancy forecasts another double digit rise in 2011 as several European countries will struggle with weak economies, poor consumption and low inventories.
Germany has seen a small rise in consumption recently but mill orders still remain low, MEPS said Wednesday.
“Local mills are willing to roll over period four prices for deliveries in January/February 2011, by which time they expect to be able to charge more,” MEPS said. “Consequently, many buyers are now placing larger orders than normal ahead of the increases.”
In France, buyers are already beginning to look towards 2011’s first trimester as 2010’s final few months saw coil prices fall. Any increases will depend on a pick-up in demand as inventories remain low, MEPS said.
Italian steel producers have been pushing for higher mill prices in 2011’s first trimester.
“Producers are pushing for further advances during period one next year,” MEPS said. “However, final demand has stayed depressed, making it difficult for the end-users and distributors to pass on the higher mill prices.”
Consumption in the UK has been flat despite positive projections by local for 2011. There have been orders placed for January but producers are not satisfied, wanting more orders booked for February and March, MEPS said.
Spanish consumption has picked up recently after being completely flat as buyers have turned to local steel prices due to exchange rate movement raising import prices.“(Exchange rate movement) have resulted in dollar denominated import offers becoming far too expensive,” MEPS said. “Customers are also concerned that higher mill input costs will push up domestic steel prices.”