Steel stockholders in Germany do not see business activity increasing above the average of recent months as a result of the escalating Middle East conflict.
In the long products segment, many mills left the market in the week after the US-Israeli attacks on Iran and suspended offers, suggesting that a price hike was imminent, partly in expectation of surging energy costs.
At the annual press conference of large distribution group Klöckner & Co this week, chief executive Guido Kerkhoff said upon inquiry that such incidents do affect market activity, but refrained from giving a clearer picture.
In an information bulletin to customers, another distributor writes that rising oil and gas prices will certainly affect steel prices. But the writer also cautions that the degree of increase “will not least depend on the buying behaviour of market participants”.
Several market participants tell Kallanish they have not seen much extraordinary buying activity since the Middle East situation escalated. “I would have expected [increased buying], and I’m a bit baffled it has not happened,” says a manager of a sections distributor. He recalls panic buying when Russia attacked Ukraine, “when customers came rushing asking for volumes they had booked for delivery two months later”. This is not happening now, he says.
Fears of shortages are so far confined only to fuel. “If you look at the petrol stations here in Stuttgart, the lines are long,” the manager says. In fact, car fuel is the most debated topic in Germany, as many players argue that prices in the country are higher than in most other EU countries.
A spokesman of a coil service centre notes that truck operators are especially suffering from a diesel price that has risen above that of regular petrol, which will likely filter through to freight costs. But in terms of demand and buying activity for steel, “I have not seen an increase resulting from the Iran war. Steel is slower than oil,” he notes.
