The post-summer holiday lull in the French steel market is dragging on, with uncertainty and political instability weighing heavily on sentiment.
Market participants report little appetite for new purchasing, as buyers continue to adopt a cautious attitude. Transaction prices remain largely unchanged from early-September levels, reflecting weak demand and the lack of any recovery signs, Kallanish notes.
“Steel processors and distributors are not managing to make any money, as there are practically no margins. Companies are chasing volumes and fighting, and negotiations with producers are complicated,” one market source comments. Producers of both long and flat products are attempting to push through price increases, yet buyers remain sceptical due to sluggish consumption.
A producer notes that inventories are slow to deplete, leading to stock accumulation too early in the year. Stock levels normally rise towards year-end as buyers replenish inventories before the Christmas break. However, the current slow pace of demand suggests that stock build-up is happening prematurely.
French buyers, particularly of sections, are resisting ArcelorMittal’s latest €30/tonne ($35/t) hike in European longs quotes. The French longs market remains subdued. Foreign merchant bar producers have returned with aggressive offers, putting further pressure on domestic suppliers. Merchant bar prices are currently flat at €220-230/t base delivered, excluding size extras.
Rebar values, after a brief softening at the end of last month, remain unchanged at around €600/t delivered on average, with sales limited to relatively small volumes and buyers reporting full stocks that are depleting very slowly.
Sections are similarly stable at €750/t delivered, although mills are attempting to lift offers to €770-780/t. Many customers covered their needs ahead of the proposed hikes and are in no rush to place orders. With consumption still weak, market sources doubt producers will succeed in enforcing higher prices.
Scrap prices in western Europe decreased this month by €10/t and are forecast to decrease again in October following the latest drop in Turkish scrap values.
Natalia Capra France
