French long steel consumption remains stable compared to last month, with multiple buyers reporting stable volumes albeit at margins too low to turn a profit, Kallanish hears.
Uncertainty and political instability continue to weigh on sentiment as investments are delayed, and trading volumes remain relatively low.
A large buyer says that mills continue to produce, but sales are below the level of production, which creates a fragile balance.
While transaction prices for longs remain largely unchanged from early-October levels, sources see that competition between European mills is strong. This, coupled with weak sales, high production volumes and increasing producer stocks, may cause prices to slide, particularly on some products such as merchant bar where foreign competition is fierce.
The EU’s new safeguard proposal and CBAM coming into force in January should not impact longs prices, according to market participants, as imports from overseas are minimal. Tube and sheet prices are instead edging up following the recent increases implemented by coil producers in Europe, including ArcelorMittal.
In the south of France, the presence of Spanish and Italian producers is resulting in longs prices that are slightly lower than in the north.
A seller in the Lyon area reports Italian and Spanish prices for rebar about €30/tonne ($35/t) lower compared to domestic prices.
“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 long and flat products are attempting to push through price increases, yet buyers remain sceptical due to slow consumption. One producer notes that inventories are slow to deplete, leading to stock accumulation.
Rebar values remain unchanged at around €600-620/t delivered on average, with sales limited to relatively small volumes as stocks deplete slowly.
Sections are similarly stable at €750/t delivered on average. The recent attempt to increase prices to €770-780/t in September was not successful.
Merchant bar prices represent the competition of Spanish producers and remain unchanged at €220-240/t delivered.
Considering the slow market and the competition amongst European producers, prices are forecast to be weak in the coming weeks.
Natalia Capra France
