There is likely to soon be a reduction in steel consumption and prices in Central and Eastern Europe as the market is overheated after an “…extremely good” 2017. So said Jan Moravec, executive director – corporate audit at Czech distributor giant Ferona, during Tuesday’s Central Europe Regional Meeting of Distributors’ association EUROMETAL.
“2018 will still be ok, but we are extremely nervous – if we do not perform, we are nervous, and if we perform too much we are nervous as well because it’s not sustainable,” Moravec said during the panel discussion at the meeting in Vienna attended by Kallanish.
“We really think we are on the top, I mean the V4 countries… We hope there will be no drop, but there will be a certain slowdown and definitely a certain reduction, but of course no one knows when,” he continued. US tariffs have clouded the situation further.
Roland Fazekas, president of Hungarian stockholder Carboferr, added: “We could see very nice figures for the construction market… for Hungary and Poland, but we already see the price correction in the rebar market, for example, and in terms of demand the past two months was really a challenge for our business. In some segments, in flats, quarto, for example, the market is quite stable, but in longs we already see that a storm is coming.”
If the EU is not given an exemption from US tariffs, moreover, Italian suppliers will return to supplying the European market, Fazekas added.
Moravec said potential risks for the Czech market include reduced consumption; price volatility; the performance of Germany, on which Czech steel suppliers rely; and Chinese and Russian exports. Moreover, customers’ payment discipline could cause problems. Opportunities include digitalisation and investment into other products such as plastic or composite materials, in order to offer customers a complete package.
In a presentation earlier in the day, Moravec observed the success of populist governments in the V4 region should not have a negative impact on the recent good economic growth.
US steel tariffs should have little direct impact on European steel sellers as no EU countries are among the US’ major suppliers. The tariffs are therefore “…not critical or vital for the European industry in general,” Moravec opined. “On the other hand, there is the risk of pressure towards prices because all the countries, if they are not able to export to the USA, they will be trying to find new markets.”
Kallanish
