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European steel prices decline from summer highs and remain stable high

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The European steel market saw increased uncertainty in early September, caused by doubts about stable demand from the automotive industry, increased imports and increased production at metallurgical plants.

European steel prices decline from summer highs and remain stable high

Over the past month, European flat steel prices have generally declined. Platts' daily estimate of the hot rolled coil price as of 3 September was € 1,120 per tonne EXW Ruhr, below the all-time high of € 1,190 per tonne EXW Ruhr on 25 June.

Prices for European rebar have also shown some weakness lately, albeit less pronounced. Platts' weekly rebar valuation began to decline amid a calm summer and scrap prices in August to € 835 /t EXW Northwest Europe on September 1, but sources say fundamentals remain strong.

The increase in the volume of imported materials offered and entered into Europe in recent months has led to increased price pressure on local companies, although the enterprises have not officially changed prices. Manufacturers are currently negotiating long-term contracts, in which manufacturers insist on maintaining the current price level.

A poll conducted by Platts in late August and early September showed that the overall steel price forecast index is 56, while the most optimistic manufacturers give 67. Traders and distributors, as well as end customers, expect a stable supply at 50 (50 means stability).

Sentiment on steel price dynamics gradually shifted from a highly optimistic 96 in May to more stable expectations over the summer as the market experienced a seasonal summer slowdown in growth. However, over the past two weeks, doubts have emerged about the stability of demand from the auto industry, under pressure from a chip shortage, which is forcing factories to suspend production.

According to the latest data from BDS, stocks of flat products in Germany increased by 8.5% from June to 1.2 million tons in July, stocks of long products increased by 2.6% compared to the month to 791,193 tons. In September, market participants expect that stocks will continue to grow: the forecast index was 57, the index of expectations for steel production was 74, which indicates its growth.

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