Posted on 13 Nov 2018
Although plate players in north-western Europe disagree on the stability of prices, one consensus is that inventories are at a relatively high level.
German distributors’ association BDS observed as much earlier this year, and after the summer. “Inventories at European stockholders have gotten bigger, but demand over the last weeks has been rather quiet,” one manager tells Kallanish. The coming weeks will show how mills are utilised until Christmas, and how stable prices will be, he adds. On the downstream side, prices to consumers will definitely be pressured.
Another manager agrees, noting that stockholders like to deplete their inventories until year-end and that a downswing might come abruptly. “Once the first gives in we will see a domino-effect,” he predicts. Both managers think that mills are well-utilised enough to stick to their prices. In Germany, these are seen at €620-640/tonne ($698-721/t) ex-integrated works for commodity grade S235.
The transport bottlenecks caused by low water on rivers and other factors have helped to shorten supplies this year, while incentives for actual industrial demand are scarce.
One Swiss observer, who believes that northern prices are prone to give in as they do in Italy, says that buyers “…book only the most necessary,” given the high level of stocks and the risk of deteriorating prices downstream. He notes that one important customer industry, line pipe production, signals “…zero demand” at present.
