The Spanish coil market has started September in a stable mode, but most market players expect domestic prices to fall in the coming weeks. The decline is seen as a result of lower demand and a slow post-summer industrial recovery, Kallanish understands from local service centre sources.
“Demand from the major consuming sectors is not as we estimated at the beginning of September,” one supplier says. “Despite most steel producers having returned from maintenance, their sales remain very weak. Activity should normalise in the second half of the month.”
Spanish mills’ S235JR grade hot rolled coil quotes are stable at some €610-620/tonne ($676.1-687.1) ex-works base. Some producers are already preparing to reduce their offers by €10-15/t.
“Consumption in the solar energy and household appliances sectors is low. It is not as we expected at the beginning of the second half of the year. There are a good number of projects underway, but demand is far from what was expected to be a stable recovery,” a market participant comments. The automotive industry does not seem to be picking up in Spain, while in Portugal the sector has deteriorated sharply so far this year.
“HRC sales in Spain remain weak and there is nervousness among sellers. Large service centres say they will not accept to offer material at below €600/t, but the international market is putting pressure on them and they will certainly have to adjust their prices in the second half of September,” another source observes.
Meanwhile, HRC import prices in Spain are at between €590-600/t cfr. The market is noticing increased competition in recent months, in addition to the traditional suppliers, coming from Egypt, Japan and Taiwan.
According to market analysts, monthly flat steel consumption in Spain ranges from 250,000-300,000 tonnes.
Todor Kirkov Bulgaria
