Nordic steel prices reach the bottom of the current cycle
Northern European mills’ selling values for strip mill products reached a low point, in late June. Regional producers proposed price increases of €20/30 per tonne, or equivalent, for new business.
However, the market was weak and, after negotiation, buyers achieved rollover figures, or, in many cases, discounts for large orders. Market participants believe that this represented the bottom of the current price cycle. MEPS has reports of spot contracts being agreed at raised figures, in recent weeks.
Many businesses have restarted operations, following the relaxation of coronavirus-related restrictions. Nevertheless, consumer demand remains subdued, and uncertainty persists, regarding the direction of northern European economies, in the second half of 2020.
Danish customers remained fairly busy, through the recent difficulties, but their order books are thinning, now. Coil inventory levels are high and purchasing activity is subdued, around the vacation period. However, steel market participants are optimistic of an upturn in industrial consumption, in the coming months.
In Sweden, coil demand from end-users, other than those in the automotive sector, is quite good. Sales volumes were high, last month, but July is quiet, due to summer holidays. Construction activity, in the country, where restrictions to fight the coronavirus were not introduced, is forecast to fall by only 4 percent, year-on-year, in 2020.
The direct effects of the Covid-19 pandemic are easing, in Finland, but industrial activity remains below its normal level. Although government investment continues, few private construction projects are starting, in the wake of the virus outbreak. Coil stockists have sales booked for only a short period ahead, but local OEMs are reported to have orders until the end of September.
Strip mill product prices are expected to increase, in the Nordic region, after the summer break, with demand from automotive supply chains and other manufacturers forecast to pick up, gradually.