UK steel demand is likely to improve from sectors such as construction in 2025, but restocking will be gradual, Kallanish heard from panellists at the UK Metal Expo in Birmingham on Wednesday.
“We are seeing pockets of improvement in underlying demand, particularly in construction, so we’ve seen some construction projects which were previously delayed being restarted, which is good,” said Christiane Taylor, pricing manager, Tata Steel UK.
“The PMI indices in Europe reflect the lower level of activity we see in mainland Europe, so the UK is in a better macroeconomic position,” she added.
This improvement in sentiment was also echoed by another panellist.
“It’s probably been a year and a half of subdued demand in the UK, but the PMI improvement and reduction in interest rate – we’ve initially already seen an increase in enquiries in the construction sector also,” noted Mike Nielsen, commercial manager, Salzgitter Mannesmann UK. This is likely to be “companies preparing ready for next year, with lots of projects on pause due to high finance costs, and [we] expect those to gather pace as we go into next year.”
Despite orders not immediately increasing following the positive PMI reading, 2025 looks more optimistic, he added.
”2025 should see some upward trajectory on demand. I think it should gradually get better but, currently, it’s still tough,” lamented Tom McDougall, commercial director, All Steels Trading.
He also noted ongoing destocking due to high interest rates, which have made borrowing expensive, while demand levels and falling prices have also contributed to people looking to lowering their stock levels.
However, he also spoke of concerns over the speed at which demand could increase.
“You’ve got to hope we don’t have the same situation we had post Covid where you get an almost fake level of demand, overbuying again, and that flops back on itself, so hopefully people will have learnt from that situation and people will gradually increase stock levels,” he added.
Taylor agreed that stocks are currently low, but there could be restocking as demand increases. “There has been a trend maybe towards leaner stocks, and right now, service centres are holding off restocking … but maybe a little longer than planned, so when we see the sentiment change again, there will be a need to restock more, which could help with the apparent demand over the next few months,” she noted.
As a result of the leaner stocks, there is opportunity in the market. “There are pockets of issues in terms of finding relevant stocks; this is where stockholders, in general, can make a bit of money if they think they might be the only player out there with those stocks, but stock levels are definitely down,” McDougall concluded.
Carrie Bone UK
