EU Steel Prices in Decline in May as Demand Falters
The recent negative trend in European strip mill prices continued, in May. Reduced demand from the auto sector is still undermining the steelmakers’ ambitions for increased basis values. Moreover, general activity in the marketplace is below projections for this time of year. Global trade tensions and political uncertainties led to a lack of investment and created a great deal of caution. Service centre inventories are in surplus for current requirements, leading to substantial negative pressure on resale prices. Procurement by distributors remains weak. New import offers are uncompetitive, at present. Large quantities of foreign material, booked at the turn of the year, will take time to be consumed.
Due to weak demand, and in order to try to stem further price erosion, ArcelorMittal announced its intention to temporarily idle production at the steelmaking facilities in Krakow, Poland, and reduce output in Asturias, Spain. In addition, the planned increase of shipments from ArcelorMittal Italia will be slowed down. These actions should result in a total reduction in supply of 3 million tonnes per year. In a later development, the company informed buyers of an intended price rise of €30/40 per tonne for all strip mill products.