German analyst sees prices dropping further in 2024

The current low steel prices in Germany, and its neighbouring countries, will not rebound so soon going into 2024, according to Peter Fertig, analyst at MBI Infosource.

Speaking at MBI’s Stahltag conference in Frankfurt on Tuesday, Fertig cited an array of economic factors influencing EU prices: from local energy costs and purchasing indices to incentives in Asia and the strikes at Australia’s LNG plants.

For local coil prices, he referred to the forecast he gave at last year’s event, stating that “the worst-case scenario, mercifully, did not come true”. For hot rolled coil, that would have been €375/tonne ($401). But neither did the best-case scenario of €925 match the effective March peak of around €850. In fact, the average value Kallanish heard from him back then – €650/t – is more or less the average at which prices remained throughout summer.

Going forward, however, Fertig recommended preparing for a further dip, although the range of scenarios is less extreme than those he assumed for 2023. For 2024, he predicts an average price of €575/t for HRC in 2024, in between a best case of €750 and worst case of €475.

His preview extended to other steel products. For cold rolled coil, he anticipates an average price of €625 (best €825, worst €525); for rebar €500 (best €725, worst €425); and for wire rod €575 (best €825, worst €450).

In his presentation, he noted that profitability has recovered slightly for makers of flat products, but will remain tense for long products. One aspect here is the weakness of the construction industry, which mostly affects long products, he noted.

Christian Koehl Germany