Aug 02, 2022
Demand impressions differ in northwest European coil market
2022-08-08
Order activity from plate buyers in northwestern Europe is extremely low and will not pick up notably as long as the summer holidays last, sources observe.
“People are buying only the most necessary material,” says the managing director of a German company that both distributes and processes plate. “They will wait and see until September presumably, and remain on stand-by for prices coming down further.”
In fact, prices already slid very recently, with market sources now reporting offers of €1,100/tonne ($1,130) and even lower for S355 grade, at least for plate cut from coil. For reversing mill plate, opinions differ, but some claim prices there have arrived in that range too.
According to the manager, his company’s distribution activity is low, but the processing department has lots of orders to work on, as do other processors. “I do not believe we have a real low of demand,” he tells Kallanish.
The slowdown that came with Russia’s attack on Ukraine mostly hit projects by private investors, of which many were suspended. Against that, public infrastructure projects cannot be postponed that easily, another manager cautions. “50% of Germany’s bridges need to be renewed, half of those pretty soon, the other half in a matter of 4-5 years,” he notes. He adds that not many mills are licensed by the standards set by Deutsche Bahn for that purpose.
Another observer, however, points out that public investment is not completely unharmed by the turmoil seen this year. After all, construction companies contracted by the government need to work profitably as well, and authorities are slow with reacting when circumstances change drastically.
“When a bridgebuilder planned a budget last autumn on the basis of then €1,100/t for plate, it came to a grinding halt when peaks shot over €2,100 in April,” he says. Authorities have not released more money yet, “although it ought to be clear to everyone: when everybody talks about war, the conditions of last autumn cannot apply anymore”, he adds.
Quite possibly, the intermediate irritation has been overcome now that plate prices are returning to the mark of last autumn.
Christian Koehl Germany
Source: Eurometal
