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Poor Demand Restricts Steel Price Rises as Raw Material Costs Increase

Date: 2019-03-25
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Raw material costs put upward pressure on prices, in northern Europe, in March, but demand was insufficient to support proposed hikes. Flat products selling values, were, for the most part, unchanged, in euro equivalent terms. Regional mills have spare production capacity and delivery lead times remain short. Supply chain inventories are at a high level. Asian import offers are, in most cases, not sufficiently cheap to be attractive.

Danish domestic selling values for hot rolled coil were rolled over, from the previous month. Swedish industrial output is at a lower level than last year. Prices are quite stable. Construction activity has decreased in Finland, in recent months. Prices are unchanged, in the Netherlands, amidst customer uncertainty and subdued demand. Business activity is flat, in Norway.

Hot rolled plate consumption is steady in Austria, Sweden and Norway. Market activity is subdued, in Denmark. EU safeguard quotas are adding to buyers’ reluctance to place import orders. Finnish domestic sales are weak, and selling values slipped. Delivery lead times, from European suppliers, are very short. Buyers, in the Netherlands, note an increasingly firm stance, on prices.

European-produced cold rolled coil is plentiful and substantial shipments from Asia are expected. Selling values are unchanged, in Denmark, this month, despite the regional mills’ wishes for increases. Finnish service centres are well stocked. End-users are resistant to price increases. Austrian stockists believe that prices are at the bottom of the current cycle. Norwegian buyers are, increasingly, sourcing from third country suppliers. With no application of EU tariffs, offers from these sellers are very attractive.


Weak demand for coated sheet and coil from the automotive sector persists. Galvanised material is abundant, in Denmark, and regional mills are operating below full capacity. Market observers believe that the peak for Swedish manufacturing activity has passed. Orders from the auto supply chain remain depressed, in Finland. Buying activity, by industrial consumers, is weak, in Austria. Norwegian domestic demand is subdued.

Sales of wire rod to Swedish manufacturers are declining. Prices are unchanged from those of last month, in euro equivalent terms. Finnish consumption is fair, but pricing is tentative. Ex-mill prices rose by around €10 per tonne, in the Netherlands, this month, despite mediocre demand.

The Danish domestic market for medium sections and beams is quite stable, although supply chain participants report that significant rebates may be achieved, for large orders. The declining building sector has been a major factor in the downturn in Swedish industry, during the past year. A modest increase in Finnish domestic selling figures was agreed, this month, as a result of rising raw material costs. Construction industry participants, in the Netherlands, report a positive outlook, but current demand is subdued. Mills issued increased list prices, in March, but only small increments were agreed with purchasers.

Soaring mill input costs supported rising reinforcing bar values, in Sweden, in March. However, the effects, on the market, of the Vale mine disaster, in Brazil, are expected to subside, soon. Buyers, in the Netherlands, report offers of small parcels of Ukrainian material. Rising raw material costs led to modest increases in rebar values, in Austria. Local producers pressed for price hikes in Norway but purchasers resisted.

Many EU buyers are refraining from placing orders on UK producers of merchant bars. They are wary of the possibility of imminent post-Brexit tariffs being applied. This has the effect of tightening supply, in the region.

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