A market where demand is having difficulty in taking off, but where the producers are sending out definite signals - this is the situation in the European flats market in the early days after the return from the summer holidays.
After first waiting a little, both European and non-European flats producers announced upward adjustments to price quotations for their products. Compared to July, the increase in hot rolled coils has been of the order of around €15-20/mt. Cold rolled has also gone up, while hot dip galvanized is less positive.
Besides the increases in quotations, there has also been a lessening of offers from non-EU countries. The Chinese steel producers, in particular, seem to have less material available. Moreover, non-EU prices are more or less in line with European prices.
With regard to demand, the situation has so far failed to meet the expectations of market players. The level of orders is slowly returning to normal, but a more brilliant pick-up was expected. This situation makes it difficult for traders to pass on increases.
Stocks are at all levels of the sector are currently medium to low.
For the near future, demand will continue to constitute the main question mark. As regards offers, no great upheavals are foreseen for the short term: purchases from non-EU countries have already declined. In addition, the closure of ILVA's No.2 rolling line (foreseen for the end of September) should mean a reduction in the quantities of available material in Italy.
A survey of Italian service centers concerning the domestic flats market indicates expectations for a general amelioration. In July, there had been a falling off in sales, in stock levels and quotations. After the return from the August holidays, there should be an improvement in volumes and quotations in September. However, the destocking phase in the market is expected to continue for another while.