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Steel prices in southern Europe are rising, despite weak demand

Europe / Ferrous metallurgy / Analytics
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southern Europe is experiencing a downturn in steel demand, however, producers will have to raise prices to offset growing raw material costs.

Steel prices in southern Europe are rising, despite weak demand

steel Producers in southern Europe will try to raise prices in the near future after in Italy and Spain the basic price of flat rental fell by 60 - € 85 per tonne since March.

the cost of steel production, especially in the procurement of iron ore, has increased significantly over the same period. Consequently, the profit margin of the factories located in unstable low level. This is compounded by the decline in sales due to outages caused by a coronavirus, in all sectors of steel consumption.

In addition to the high cost of raw materials, it is expected that the amendments to the protective EU quotas and the reduction of steel production will contribute to the initiatives of producers to raise prices. In addition, Turkish and Indian exporters are less aggressive than in recent months. However, many southern European customers believe that higher prices will be short-lived, as expected sustained improvement in demand.

top stocks in Italy

Italian manufacturers and distributors of steel faced with adverse financial circumstances in connection with current market conditions. The participants of the supply chain are trying to reduce inventory, but because of lower demand this is not happening. The material can be quickly obtained from local sources for small volume purchases. Liquidity problems are growing.

Consumption of the end user in Italy is mixed. Demand from vehicle manufacturers and household appliances to unusually low for this time of year level. A slight rise is noted in the packaging segment. Activity is more favorable in the construction sector.

Spanish distributors buy gently

Activity in the Spanish market is growing, but not enough to prevent lower prices in the last month. Distributors continue to be purchased only out of necessity. However, it is believed that the base values for the production of the rolled strip in June reached the bottom of the current cycle.

Growth of car production in Spain after stops associated with the coronavirus, a minor. In recent months, service centers, serving customers in this sector, there has been a sharp decline in sales. On the contrary, the volume of construction companies are at a reasonable level.

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