German buyers are looking to stay in waiting mode as the latest monthly S&P Global Platts steel sentiment survey showed the index for inventories continuing to drop this month.
Stockholders and traders indicated they would remain hesitant about booking orders in the coming weeks. The index for that particular sector was at 8.3, indicating the intention to destock. Stockholders in particular sit on high stocks.
As reported, March levels at German stockholders stood at 1.55 million mt for flats and 878,000 mt for long products, the highest levels since July 2014.
Traders on the other hand are currently waiting for clarity over the details of expected safeguard measures by the EU on steel imports following the US Section 232 tariff announcements, while activity in the northern European import market remains subdued.
End-users expect inventories to rise, indicating they would increase purchasing this month. Overall, Platts’ index for inventories gave a reading of 33.3, significantly below the 50.0 mark that notes stability.
The pricing outlook increased to 61.9, suggesting the expectation of increasing prices. Mills and end buyers were the most bullish, while the stockholding side showed a bearish outlook at 41.7. Sources said German producers would keep prices firm for the moment.
The outlook for May production was up slightly from last month’s survey, with an overall indication of 54.8. Mills and stockholding respondents were firm in their outlook, but end users indicated they would slightly decrease output in May.
Laura Varriale, PLATTS