Distributors in Germany remain reserved when buying larger volumes of steel for their inventories, according to Klöckner & Co chief executive Guido Kerkhoff.
The point of replenishing the shelves has not yet been reached, Kerkhoff said during a conference call on Wednesday when asked by Kallanish for the status quo of distributor and service centre buying behaviour. Regular business with a continuous turnover of products is not yet in sight. “I think the status quo is that people buy only as much as they are expecting to sell,” he replied.
He alluded that prices are starting to see some gentle recovery, but real demand is yet to improve. Nevertheless, he is not completely pessimistic. “Warehouses are still relatively empty, but, yes, I do believe that the point of return to business will come,” he noted.
His estimation is reflected in the outlook the company gives for the fourth quarter, and ultimately for the whole of 2024. In Europe, it sees a drop in real steel demand by 1-3%, with the transport/automotive segment pointing more steeply downwards than construction, mechanical engineering, or household appliances. The one sector with relatively stable demand is energy. “It does not look like activity will increase, but we are at an already low level,” Kerkhoff said.
The group is overall more upbeat about performance and prospects in its other big market, the USA, but here, too, sees a slight dip of between 0% and 1% in demand from its customer industries. However, “this is quite normal in an election year with the insecurities this brings,” he concluded.
Christian Koehl Germany
