Eastern Europe distributors hope for 2016 boon to continue

Steel producers and distributors in Central and Eastern Europe counted last year as positive both in terms of sales and prices, Platts heard at EUROMETAL’s Central European meeting held in Warsaw on Wednesday. The price momentum continued through to the first quarter of 2017 but high inventory levels among stockholders and distributors are hampering further uptrend, they said.

A Polish rebar mill saw its prices keep rising this year, adding some PLN 200/metric ton (€47) to reach PLN 2,050/mt (€480) delivered, and a decrease is not in sight yet, it added. A regional construction steel fabricator noted that lower price levels were also possible despite bullish sentiment created by mills, however.

For ArcelorMittal this year started with positive sentiment and high industry confidence, particularly in Central and Eastern Europe. While average EU-28 consumption is steadily recovering but is still below 2007-08 peak levels, eastern EU countries are highlighted as the only regions comfortably outperforming pre-crisis levels, said Laurent Plasman, head of operational marketing at ArcelorMittal flat carbon Europe. Total flat steel consumption in the V4 countries (Poland, Czech Republic, Slovakia and Hungary) surpassed 2008 pre-crisis levels (10.6 million mt in 2016 vs. 8.5 million mt in 2008), Plasman noted.

“Rolling mills have very good order books for flat products,” Roland Fazekas of Hungarian trading company Carboferr added. His Polish counterpart noted that the price momentum has somewhat weakened more recently as the market made large purchases of flat products in Q4 in anticipation of price hikes in Q1. He added that hot-rolled coil prices in Poland reached €560-570/mt base delivered but resisted further growth so far. At the same time, he noted that the EU mills remained firm on offers, claiming to be well booked for the coming months.

In Poland alone, apparent steel consumption hit an all-time high in 2016, at 13.1 million mt. Consumption of flat and long products reached 7.8 million mt and 4.2 million mt respectively, with the remaining 1.1 million representing tubes and hollow sections, said Piotr Sikorski of Polish Union of Steel Distributors (PUDS). The growth in steel usage brought no improvement in trade balance, with import growth of 7% outstripping 5% growth in export.

Wojtek Laskowski, PLATTS