German steel producers expected steel prices to remain strong during January as mills try to aim for higher prices, according to an S&P Global Commodity Insights survey.
The December index for traders’ sentiment stood at 68.75 points, compared to 80 points in December, data from S&P Global’s German Steel Sentiment Survey showed. The index for producers’ sentiment was at 87.25 points, compared with a December index of 81.25 points, showing that producers were more bullish regarding the near-term price direction. The overall index for prices was approximately 78 points, compared with 81 points for December.
Steelmakers in Europe were aiming for higher prices for their products. One long steel distributor source told S&P Global that European steelmakers were aiming for higher prices driven by strong scrap and power costs.
“Suppliers are talking about a shortage of scrap and they say scrap is mostly being exported since they are getting better deals there,” he said.
The Platts assessment of Northwest Europe rebar was up Eur15/mt week on week to Jan. 10 at Eur635/mt ex-works. Alongside, the Platts assessment of European medium sections price (category 1, S235 JR) increased Eur20/mt week on week to Jan. 10 at Eur790/mt delivered, S&P Global data showed.
On the flat steel side, buyers were expecting an increase in domestic prices despite uncertainties about mills being able to achieve their target levels. Some market participants were also concerned about a lack of real demand amid mills’ bullish targets as major steelmakers restarted idled blast furnaces, which would result in higher supplies in coming months.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe stable day on day at Eur730/mt ex-works Ruhr Jan. 10.
The overall index for German inventory sentiment showed an improvement, reflecting market expectation of an increase in inventory levels in January, with an index of approximately 47 points compared with 35 points in December. The index for steel producers for January was at 37.50 points, compared with 25 points in December. The index for traders’ sentiment stood at 56.25 points, compared with 45 points for December, showing that traders were more bullish regarding the near-term trend compared to producers.
Production levels to increase
European flat steel sources reported the restart of idled blast furnaces from major steelmakers as the new year began amid concerns of a lack of real demand. Overall, the market expected production capacities to increase for January.
The index for production outlook was around 47 points for January, compared with 30.63 points for December. The index for traders’ sentiment was at 43.75 points, up from 30 points December. The index for producers’ sentiment was at 50 points, up from 31.25 points in December, as producers were more bullish regarding production activity compared to traders.
Author: Rabia Arif, rabia.arif@spglobal.com
