STEEL NEWS

MEPS: producers of rolled steel in Northern Europe will raise prices

According to the British analytical agency MEPS International Ltd., at the end of July, the main European producers of rolled steel announced significant price increases in an attempt to offset the increased costs of raw materials. Steel supply is declining. Manufacturers say the order books are full by the end of September, and the revised EU quota system could reduce the flow of imports.

In early August, Scandinavian shoppers returned from their traditional summer vacation to meet the anticipated price hike. Market participants believe that the bottom of the current cycle has been reached and that low prices are gone. However, some buyers are wary of rising prices and are wary of holding large inventories in times of uncertain demand. Vacations continue in continental Europe, limiting export opportunities for Scandinavian producers. However, activity is reportedly returning to pre-COVID-19 levels.

Demand for hot-rolled coil is positive as industrial activity resumes after the holidays and car production is recovering from a significant drop. Although the lack of new projects reduces the likelihood of significant price increases.

As activity slowly recovers from the Covid-19 quarantine, long range factories in the EU are sticking to their usual scheduled summer shutdowns. The rising cost of scrap has put further pressure on mills' profitability, but producers have struggled to raise the cost as delivery times are still short.

It is hoped that government stimulus packages will start operating soon, which will boost demand. On the other hand, such support is a bailout for struggling producers, thereby maintaining excess steelmaking capacity in Europe.

Construction activity has not yet fully resumed after the holiday, but markets in the Nordic countries are generally recovering as they are less affected by the coronavirus than other parts of Europe.