Steel Strip

Although we have noted some minor downward corrections for flat products over the last month, market prices are starting to stabilise in most parts of the EU. The import threat from third country suppliers appears to have abated. The domestic mills would like to impose rises for the first quarter 2010 but the success of this initiative is not guaranteed as final consumption remains weak. Service centres are determined to keep their inventories down to match the reduction in demand. Inadequate credit insurance continues to be a major issue in many countries.

The UK market shows no improvement. If anything, consumption reduced during October/November but inventories are now at comfortable volumes. Companies are targeting to have as little stock as possible by the end of the year and, consequently, are unlikely to buy more unless the need is urgent. The distribution sector is particularly cut-throat at present, with many resale prices not based on replacement costs. There has been some downward correction on ex-mill basis values which is likely to continue into January and February due to the arrival of third country material, although the tonnages on order are not huge.

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