French steel prices hold steady
French steel prices remain largely unchanged, even in the face of significant declines in scrap values observed in May. Uncertainty persists across the value chain and pressure on margins is leading to financial difficulties, Kallanish notes.
Market participants anticipate a slight decline in prices prior to the summer season. A large buyer says he is not expecting substantial restocking before the summer holiday due to slow demand. Aggressive selling at low prices is being observed downstream, resulting in a competitive environment for both long and flat steel markets.
A buyer in the southern region indicates a sluggish market characterised by competitive pricing. This is attributed to lower offers from Italian and Spanish producers who have a limited presence in the northern French market.
Domestic sections and merchant bar prices remain mostly flat this month. First category beams are at €780/tonne ($877) delivered, while domestic merchant bar prices in France are observed at €245-250/t base delivered, with effective prices, inclusive of size extras, at €665-670/t delivered. Beam producers in both northern and southern Europe are said to have enough orders.
The domestic rebar market is also flat, with values hovering at €640/t delivered on average, sources suggest.
Natalia Capra France
European stainless flats market downturn deepens
The European stainless flat steel market is facing a significant downturn, characterised by weak order intake across the entire value chain and a persistent downward trajectory in coil prices, stainless steel sector sources report.
Mills in Europe are decreasing their prices for June and July delivery. From the high point of the range recorded recently, EU coil values have experienced a decline of over €100/tonne ($112), while order books continue to face significant pressure, Kallanish notes.
Supply of coil in Europe remains above demand, with a substantial influx of material from Asia anticipated by July. This situation is likely to bolster inventory levels among buyers and contribute to a further decline in domestic purchases.
Mill sources and a steel processor in northern Europe indicate the market is expected to face continued pressure in the upcoming quarters. However, a potential recovery may emerge after the summer, as inventory levels in Europe are projected to decrease. This scenario could compel buyers to source coil domestically, benefiting from quicker delivery times.
Service centres and their customers are currently engaging in low-volume transactions, often on a back-to-back basis, in order to mitigate exposure in this unpredictable market environment.
Several processors suggest first-quarter deliveries were consistent with those of Q1 2024; one reports achieving a modest profit. “Today, if you’re in the positive, it is already a success,” he adds.
Several service centres are facing financial challenges and have been unable to raise their prices for sheet, which are now considered unsustainably low. A mill source indicates producers may have hit the threshold of their elevated cost structures and, at current pricing, they are encountering financial losses.
From a macroeconomic standpoint, anticipated interest rate reductions are likely to provide a more positive outlook, while end-users appear to feel that demand has bottomed.
The mill source confirms the projections that Q4 will yield some market improvement. Current pricing for domestic cold rolled coil in northern Europe is hovering within the range of €2,350-2,400/t delivered, depending on order volumes and specific buyer requirements.
The forecast for 2025 appears unfavourable. Businesses are competing for orders, with some prepared to reduce prices, with the end-user being the main beneficiary, a service centre comments. Nevertheless, lowering prices is not creating demand. Asian CRC prices are significantly lower than those in Europe, currently at €2,100-2,120/t cfr duty paid. Logistics and port expenses of about €100/t come on top, as well as financing costs.
The implications of CBAM are creating a significant atmosphere of market uncertainty, particularly for service centres grappling with the ambiguity surrounding the mechanism and the challenges in quoting specific products to end-users. A coil buyer says they will cease sourcing from the import market. Downstream, the objective for each upcoming quarter this year is to achieve at least breakeven and navigate the challenges without incurring losses.
Natalia Capra France
UK industry calls for lower electricity prices to sustain investments and net zero transition efforts
In a joint letter, a coalition of manufacturers, infrastructure investors, trade bodies, engineers, consultants, and climate groups has called on Rachel Reeves, the chancellor of the UK’s Exchequer, to reduce electricity prices immediately by moving legacy policy costs from electricity bills to general taxation and providing targeted support for electrification.
According to the letter, UK consumers face some of the highest electricity prices in the world, holding back investment and putting industries out of business at current critical economic and geopolitical conditions. High electricity prices also hinder the UK’s transition to net zero and undermine the UK’s competitiveness.
The coalition stated that shifting policy costs to general taxation would be an effective way of reducing power prices in the near term, while enabling policy costs to be recovered progressively. Energy UK estimates that this would cut business electricity prices by up to £40/MWh, lowering bills by 15 percent, and reducing household electricity bills by up to £370 a year. This would reduce the cost of bills and goods for consumers, and free up business capital to invest in the UK. In addition to moving policy costs from electricity bills, the coalition is calling on the government to provide targeted support for the electrification of industry.
The coalition includes 7Steel UK (formerly Celsa Steel UK), Aldersgate Group, British Glass, Buro Happold, Cemex, Ceramics UK, Chemical Industries Association, Confederation of Paper Industries, E3G, Encirc, Energy Intensive Users’ Group, Green Alliance, Heidelberg Materials, Major Energy Users Council, Material Evolution, MPA and UK Steel.
