Prices for flat products in northern Europe could go down by another 5-8% until the end of October, according to MBI Infosource analyst Peter Fertig.
Speaking at MBI’s annual Stahltag event in Frankfurt, Fertig said he expects the negotiation position of mills will continue to weaken over the following six weeks. The price of cold rolled coil in Germany is now at its lowest since December 2022, assessed at €660/tonne ex-works ($736), he added at the event attended by Kallanish.
One year ago at the same event, Fertig made a forecast for hot rolled coil prices in 2024 within a range of €750/t best case and €475/t worst case, or an average of €575/t. As it turned out, €750 was the peak seen on the market in February, while €575 roughly matches today’s market price in Germany.
In his presentation, he underlined that several unexpected factors like the wars in Ukraine and the Middle East have disrupted the “quantitative forecast model”. He noted: “If a sideline scenario becomes the dominating factor, this is a disaster for steel.”
Talking about the influence of China on the global market, he stated that the Chinese government is trying to incentivise residential construction, “but not in the traditional sense with new-building, but by regulating overproduction in the sector.” He acknowledged the government’s ambitions to reduce emissions and to keep steel production from rising.
He said prices of long products imports like rebar and wire rod from China have risen slightly, by 1%, and that a slight devaluation of the euro helped to reduce Europe’s attractiveness as a market.
Looking at incentives for construction in Europe, Fertig pointed out the European Central Bank is too hesitant with reducing the interest rate, meaning demand from construction will stay sluggish. “Looking at a horizon of three months going forward, prices of long products will be 5% below the current level,” he concluded.
Christian Koehl Germany
