There will be a downward flat product price correction but no collapse since costs of producing steel and receiving slab prevent this from happening, was the conclusion of a meeting last week of UK steel distributors’ association NASS’s flat products group.
The upward price curve is now starting to flatten slightly, with businesses taking it a bit more slowly, although the outlook is still positive. “Prices to customers are pretty static … lead times are coming back down and there is room for EU mills to come down in price,” the association says in its minutes of the meeting seen by Kallanish.
The flats market weakened in April and there are still stocks at ports that have not yet filtered through the system. Plate is however still in short supply.
NLMK is trading as normal as a UK-registered EU business and Russian slab is not under sanctions. “The only restrictions are on shipments because NLMK cannot charter Russian vessels; it can charter EU ones but then availability and cost become an issue,” NASS says. NLMK is shipping more volumes to the UK; however, this is EU, not Russian, material, it adds.
“From a coil point of view, if slab prices rise again, margins will become very tight. [We’re] not quite out of the woods yet, in regard to slab supply,” NASS observes. The talk of a market crash will not materialise due to rising production costs. Hot rolled coil is however coming under pressure and there will be a price correction.
Adam Smith Germany
