French longs buyers see no market rebound

The French long steel market appears to still be experiencing stagnation, based on feedback from various distributors and buyers. There has been no significant improvement in activity across the value chain, except for a slight increase in apparent demand for rebar, associated with the Olympic Games in the Paris area.

Suppliers involved in construction works in the area are under pressure to deliver material before the planned closures of several axes in Paris from mid-July, Kallanish notes.

“We have not observed any improvement in consumption for either longs or flats. Demand is currently unfavourable due to the consumption crisis and the inclement weather, which is causing delays at building sites,” one major longs buyer says. “The Olympic Games are slowing building sites [in other parts of France], new construction is in freefall, and the political instability is not helping.”

Producers are eager to raise prices but this is not being well-received downstream. Values have remained relatively stable, with only minor fluctuations. Stockists are expected to make fewer purchases this summer, while the distribution sector is taking a cautious approach and construction companies are experiencing a decline in production volumes and order books.

“Prices are stagnating. They are neither increasing nor decreasing. Our members expect a negative 2024,” a purchasing group manager says. He adds that the sector is experiencing financial challenges this year and buyers are refusing any price increases.

Longs buyers are struggling to predict the future direction of the market. The stable prices are a cause for concern, as there is a possibility of a downward shift. Rebar values have seen a slight increase of €10/tonne ($10.7) on average since the beginning of the month, with the current domestic price at around €620/t delivered. According to sources, merchant bar prices are expected to remain steady, at €660-670/t delivered, while the first category of sections is estimated to be at around €750-770/t delivered.

The French construction crisis is continuing, as reported by national construction federation Fédération Française du Bâtiment (FFB). By the end of April, year-on-year, new building permits and new residential construction fell by 10.2% and 10%, respectively. In the first quarter, there was a significant decline in sales within the private property sector, with a drop of 29.9%. Similarly, sales of private properties experienced a sharp decline of 25.9% compared to the previous year.

Natalia Capra France

kallanish.com