STEEL NEWS

MEPS: European steel coil market is limited by shortages

According to the British analytical agency MEPS International Ltd., prices for hot-rolled coils in Europe are approaching record highs both in the north and in the south of the continent. The average regional transaction value for March is € 753 per tonne. This compares to the peak of € 791 per tonne recorded in August 2008.

After a slowdown in February, prices recovered their upward trend. The full implementation of the increases announced by the largest domestic steelmakers will push the previous record high above the level.

Strip buyers report material shortages, particularly for galvanized coils and sheets. Despite the fluctuations in scrap prices, the anticipation of a steel shortage in the future supports upward price pressure.

Production at ArcelorMittal Italia remains limited. Concerns about the reliability of Liberty Steel following the collapse of its main financial sponsor are fueling uncertainty in the market.

Delivery times for flat products, excluding thick plate, have now been extended to the third quarter of 2021. The mills' offers are limited only to contract business and regular customers.

The automotive sector remains a key consuming industry. However, the shortage of semiconductors is limiting the production of cars.

Spring weather favors the growth of the long product market. Its good availability in factories is reported.

Rebar prices continued to fall in March due to lower international scrap prices. The fall was much more pronounced in the south of Europe than in the north. The transaction value in Spain was more than € 100 per tonne lower than in Germany. Rebar prices in Italy were less visible, but substantial nonetheless.

Construction activity is expected to kick off in the spring. State plans for a post-coronavirus budget recovery will boost demand. In contrast, a number of existing projects, planned with lower production costs, have stalled due to the recent soaring steel prices. A potential third wave of coronavirus could also slow short-term growth.