EU steel sections prices stable amid quiet demand

European domestic steel sections prices were stable in the week to April 27, as buyers held back from booking orders at consistently elevated prices.

S&P Global Commodity Insights’ assessment of the Platts European medium sections price (category 1, S235 JR) was at Eur1,500/mt delivered April 27, stable week on week.

Market sources continued to cite stable prices for most long steel products in the domestic European market as mills maintained elevated offers amid limited availability of stock, while buyers held back amid softening scrap.

Sources also reported that Russia had decided to ban gas supply to Poland and Bulgaria, which house significant steel production, demanding payment in Russian rubles instead of euros. The development raised concern in the market, where sources noted that if the issue persisted, it might start to impact other European countries as well, thus increasing energy costs, which will offset any decrease in scrap prices.

Market participants unanimously cited workable levels for category 1 medium sections at Eur1,500/mt delivered, which were stable week on week.

One distributor source in the Benelux region noted that demand is coming back after two quiet weeks of holidays because of Easter. However, with the unstable political situation between Russia and Ukraine, “it is making the financial markets very nervous,” he said.

“There is an increasing pressure from buyers [to lower prices] because of softening international scrap prices,” one European mill source told S&P Global. However, he noted that the trend in prices needed to be monitored so mills for now were maintaining levels. He also noted that if the European countries face any issues in gas supply, the high energy costs could offset any decrease in scrap levels.

Another mill source also noted that prices for medium sections were mostly stable week on week.

“Of course, we hear some imports coming in from here and there, but it is not a big issue,” he said.

Elsewhere, Northwest European domestic rebar prices were also stable in the week to April 27. The assessment of Platts TSI Northwest Europe Rebar was flat at Eur1,320/mt ex-works April 27.

One Italian mill source noted that weakening international scrap prices had started to affect scrap levels in Italy, where levels were expected to move Eur30-Eur40/mt lower in the near term, which will also in turn impact scrap prices in Germany.

S&P Global assessed Platts Turkish imports of premium heavy melting scrap down $5/mt to $565/mt CFR on April 27.

“But for the moment, I don’t see any lower prices for rebars because of lack of offers,” the mill source said, adding, “Prices are not going down, but no one is buying at the moment.”

The source also noted that not everyone in the market expected prices for long steel products to move down in the near term as because of Russia stoppage of gas to Poland and Bulgaria.

“It might affect other European countries as well where gas prices might rise again,” he said.

The source indicated domestic rebar workable prices in Germany around Eur1,370-Eur1,400/mt delivered, with deals probably happening around Eur1,370/mt delivered from local suppliers.

One seller source noted that prices were stable week on week for domestic rebars in Northwest Europe around Eur1,310-Eur1,360/mt delivered, while one European trader put mill offers in Germany for rebars at Eur1,400/mt delivered.

— Rabia Arif, Staff