German steel stockholder April sales volumes drop heavily: BDS data

Sales volumes at German steel stockholders took the brunt of weak demand in the steel supply chain and dropped heavily in April, according to latest data published by the German steel stockholder association BDS.

Sales of flat steel weakened 31% from March to April this year to 387,238 mt, responding to shutdowns of the key customer group — the automotive industry — during the height of the pandemic in Germany. In year on year comparison, sales volumes also decreased heavily by 28%.

Long steel volumes saw an on-month drop of 13% to 282,261 mt, with a yearly drop of 3.2%. Although demand for construction steel weakened overall and uncertainty over future demand softened long steel prices in April, the construction sector did not see as widespread closures as the automotive industry in Germany.

Germany started to ease lockdowns in late April, but the steel industry is still waiting for demand to pick up. Steel producers remain on lower production rates with no major plan to ramp up significantly by summer as end-customer markets ramp up proved to be slow.

Volumes on stock increased slightly in April with long steel stocks growing 2.6% to the highest volume of the year for the product group so far at 836,140 mt. In on-year comparison, long steel stocks fell 7%.

Flat steel stocks saw a slight increase of 1.5% from March to April to 1.2 million mt, while the year-on-year change amounted to a 19% drop.

Since around mid-March, steel buyers have been in a “wait-and-see” mode, unwilling to book large orders amid the continued market uncertainty.

With the majority of German steel businesses having introduced short-time working schemes, where the government provides financial aid for workers pay amid reduced shifts, retaining liquidity has increasingly become an issue for the entire supply chain.

Since the beginning of March, the hot-rolled coil EXW Ruhr price — a benchmark for flat steel and heavily affected by the auto shutdowns — decreased around 12% to a six month low at Eur425.50/mt May 19 according to the daily Platts TSI index. Rebar prices weakened after intermittent price gains in late March as scrap supply tightened due to restrictions on scrap collection. While European scrap is firming again after a brief drop late March, rebar did not follow the movement and fell since early April by 4.2% to Eur455/mt EXW NW Europe May 15, according the weekly Platts TSI Northwest rebar assessment.

— Laura Varriale