Danish steel buyers expect improved activity in the autumn

Few price movements were reported in the Danish steel market, this month. A seasonal lull in purchasing had been widely expected. Most Danish steel buyers opted to pursue conservative procurement strategies, by keeping their August purchases to a minimum.

The pace of price growth may have stalled but the Danish market, unlike its southern European counterpart, managed to stave off the threat of any erosion in the past four weeks.

Supply chain participants in Denmark have grounds for optimism, in the post-holiday period. Market sentiment remains positive. The recent reduction in activity is expected to be a temporary phenomenon, rather than being part of a longer-term trend.

Consumption by many steel-intensive industries is healthy. Significant investment in local infrastructure projects, such as hospitals and highways, is boosting steel demand, notably for long products. Activity levels in the building sector are expected to remain firm, despite the high cost of steel and other commodities. Plate usage is also strong. A high level of enquiries and forward orders are attributed to the offshore wind segment.

The primary concern for domestic buyers is the continued shortage of material, from regional steel manufacturers. Lead times for most steel products are extended. Spot availability is scarce. Many Danish steel buyers are placing orders, subject to allocated volumes.

New orders for hot rolled coil are now being placed for December/January delivery. Cold rolled and hot dipped galvanised coil is not available from European mills until the first quarter of 2022. Availability is better for long products, but stock purchases have ceased. October delivery is being commonly quoted by regional suppliers.

Non-European supply is limited by current EC safeguard measures and antidumping duties. Asian-origin flat products into Denmark, reportedly, offer little price advantage, compared with regional quotations, although the promised delivery time is comparable, in most instances. Competitive price offers from Russian suppliers appear to have been withdrawn. This is due, in part, to the introduction of a new export duty.

The recent holiday period appears to have given Danish purchasing managers a much-needed breather, following a turbulent twelve months. It is highly likely that European steel manufacturers will announce their intention to lift prices in September. A degree of restocking activity will embolden their ambitions. Danish steel buyers are expected to resist the mills’ pricing proposals, but it should, at the very least, consolidate recent gains.