Negative sentiment across the European flat steel market has intensified further as European countries stepped up their measures against the spread of the coronavirus pandemic, sources told S&P Global Platts Friday.
The market in Italy remains quiet but production of flat steel would continue for now, unlike several mills of long steel products that have temporarily ceased production in the country, sources said.
“Customers are waiting and not buying and next week I feel that many will be closed,” said an Italian steel service center source. “Prices are stable. I have no info that there is weakening.”
The daily Platts TSI index for HRC Southern Europe increased by Eur2/mt to Eur455/mt EXW S.EU Friday.
More countries started to restrict public life Friday following Italy’s example, while the German government pledged it would support businesses financially if they would introduce short-time working due to the virus.
An Austrian service center source said the outlook on price developments in the coming week were still unclear and that they were not stockpiling material despite others in the market reported to be doing so.
“We are only seeing ex-works prices in Italy, no delivered prices are being offered,” the source said, adding the tradable value was Eur480-482.50/mt EXW Ruhr in Germany and that import material was heard at Eur465/mt CIF Antwerp.
The daily Platts TSI index for Northern Europe remained unchanged Friday at Eur483/mt EXW Ruhr.
Following the continued spread of the virus in Germany, some buyers started to look for material with short-notice deliveries, but some say this too would be risky and that looking at current lead times in May and June there is little material left that can be delivered quickly.
“We are not going to overreact and stockpile, I can understand if small steel shops do that to keep running,” said a German steel stockholder, adding that with current lead times, it would be a gamble to replenish heavily now.
Some buyers have started to look for material from other countries, as they fear that supply would be severely disrupted.
“I don’t know if not buying from Italy helps as lead times are in May, who knows if Italy will have improved then and its affecting production in other countries?” the stockholder said.
— Laura Varriale, Len Griffin