German steel distributors’ sales saw a robust rebound in January, reaching 807,924 mt, up 73.7% from the prior month, German steel stockholders’ association BDS reported Feb. 21.
The rise in steel sales and ensued destocking have drawn down inventories within the German steel distribution network to under 2.5 months’ worth of sales, from four months previously, according to BDS.
Steel sales in January were, however, 3.4% lower year on year. It exceeded 2023’s per-month average by 2.8% but remained 10% below the 900,300 mt/month sales made during 2014-2021.
Flat-rolled steel comprised 535,192 mt or two-third of the January total sales. Being broadly stable compared with January 2023, the sales in this category recovered by 85% month on month.
German distributors sold 203,901 mt of long-rolled products in January, 42% more than in December, although 11% lower year on year.
The 1.9 million mt stocks held in January reflected roughly 70 days’ worth of sales, which reveals destocking, given that in 2023 and over 2014-2022 average per month inventories would cover 75- and 77-days’ worth of sales, respectively, according to BDS.
Destocking is particularly noticeable against the inventories accumulated within the country’s distribution network in December 2023, when they were as high as four-month worth of sales.
European steel coil buyers are currently limiting their procurements and avoiding restocking due to a bearish sentiment amid weaker appetite from construction and agricultural sectors, all of which make some expect weaker demand in the second quarter of 2024 compared with significant improvement in January-March.
Platts, part of S&P Global Commodity Insights, assessed European domestic hot-rolled coil prices at Eur720/mt ex-works Italy and Eur725/mt ex-works Ruhr Feb. 20, unchanged on the day, but down by Eur20/mt each on the month.
Author: Katya Bouckley, katya.bouckley@spglobal.com
