Nordic hot rolled flat consumption recovers slowly

26th October 2020

A gradual recovery in consumption is reported, in Denmark, supporting a modest price increase for hot rolled coil, in October. In Sweden, the trend in demand varies by sector, with sales to manufacturers of pumping equipment and forklift trucks falling very little during this year’s difficulties. Order tonnages from makers of trucks and agricultural machinery are recovering. In Norway, purchase volumes are stable but, in Finland, distributors’ sales were down by 10 percent in September, compared with the same month in 2019.

Overall, prices for strip mill products continue to rise, in northern Europe, reportedly driven more by the mills’ reduced output than by market demand. The upward trend may be subdued, in the near term, by the restarting of several regional blast furnaces, and by softening scrap costs. Supply chain participants hope that this will be offset by growing activity in the automotive sector.

Hot rolled plate consumption, In Denmark, is also recovering, albeit slowly, and buyers resisted regional producers’ proposed price increases, this month. The pickup in market activity, since the summer holiday period, has been modest, in Sweden. The recent marginal upturn in selling values was in part due to the weakening of the local currency, relative to the euro. Demand from the energy, oil and gas industries is improving, in Norway, but shipbuilding activity remains at a low level. In Finland, mergers and restructuring amongst fabricators and other metal consumers is resulting in reduced sales opportunities.

Automotive recovery supports HDG

Sales of coated sheet and coil from Danish stockists were boosted, in October, by a significant increase in German automotive activity. The recovery in carmaking continues in Sweden, where consumption for building-related applications is also strong, currently, but the outlook uncertain. Extending delivery lead times, from European mills, are supporting the case for price increases, in Norway. Buyers in Finland report a lack of production capacity, although regional galvanised coil producers have previously taken orders for substantial tonnages, at low prices.

CRC delivery lead times extending

Consumer spending was boosted, in Denmark, by government payments designed to support the local economy. Underlying steel consumption, however, will not return to normal until the effects of the coronavirus pandemic are eradicated. In Sweden, cold rolled coil delivery lead times from the local producer are extending. Difficulty in obtaining investment finance may restrict steel sales volumes, in the medium term. In Norway, demand is fair, and improving slowly. Finnish cold rolled coil buyers report that price offers from Western European steelmakers rose by more than those from the domestic producer. Sales are steady.

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European Steel Review Supplement

The MEPS European Steel Review Supplement is the sister publication of the MEPS European Steel Review, offering insight into European carbon steel prices.

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