Northwest European plate market observers believe it will take well into next year for a serious recovery in demand to occur.
“There will be a recession until summer 2024,” one central German buyer predicts to Kallanish. He points to infrastructure project development coming to a halt. “Whatever is not in pre-development now will not be kicked off until March,” he says, referring to offshore pipelines, wind parks, and liquid petroleum gas containers. “Such things need the approval of local authorities and environmental interest groups, before they even get tendered.”
Another example often overlooked is the leasing behaviour of truck fleets. “Many transportation companies give back their leased trucks and do not use the option of buying them,” he says. The parking lots of truck makers are therefore full, because of the returned vehicles, he adds.
High inventory levels at warehouses are also an issue for many distributors. “We could buy cheaply now, to mix it with material from earlier, more expensive, material, to have a better overall price ratio. But then you run into the danger of storing too much material you cannot sell. It’s a dilemma, and every house needs to solve it for itself,” he says.
In fact, he tells of a recent “white week” sell-out, sometimes at intake prices, at those companies whose business year ends in September, to clear their inventory before year-end. This points to one of the biggest European distributors whose fiscal year ends on 30 September.
Another observer concurs that warehouses are selling at the prices they bought at. “Even the big integrated mills are now willing to make concessions, in view of the weak market,” he opines. The price range given by most observers for S355 will be between €800/tonne and €840/t ($842-884) delivered, although some see occasional lows and highs beyond that range.
Christian Koehl Germany
