SteelOrbis has been informed that the local price levels for ex-Turkey HRS in the UK market are standing at £415/mt ($624/mt) ex-warehouse, excluding VAT, while UK mills are offering HRS to the local market at £390/mt ($587/mt) delivered to customer, excluding VAT. All prices are for 60-day deferred payment, on actual weight basis. Meanwhile, ex-China HRC in the UK market is standing at £365/mt ($549/mt) FOT, excluding VAT, also for 60-day deferred payment.
Local UK production HRS prices have decreased by an average of £20/mt ($30/mt), Turkish origin HRS prices have fallen by an average of £35/mt ($53/mt), while Chinese HRC prices have declined on average £15/mt ($23/mt), all compared to the price levels of three weeks ago.
Demand for flat products is currently low in the local UK market and buyers have not returned to the market yet. Also, the tightness in the credit markets is causing trouble as regards payment terms. Stocks in the UK, just as in other European countries, are registering high levels in terms of both prices and quantities. This situation is creating pressure on cash flows.
Accordingly, although official price levels for HRC are given at around £500/mt ($752/mt) in the local UK market, the price levels have in practical terms already fallen down below £400/mt ($602/mt). However, it is observed that buyers are not willing to purchase even at these reduced price levels. In other words, apart from a few deals, it is really hard to mention definite price levels in this market.
GDP in the UK has weakened by 0.5 percent in the third quarter of the current year. According to the experts, it is expected that growth figures will likely be negative for most of the 2009 period. Housing loans have declined by 51 percent compared to the same month last year. According to the Deutsche Bank AG exchange rate, the British pound has decreased in value by 23 percent. Unemployment figures are now at the highest levels since 1991. The UK recorded a budget deficit of £16 billion for November (the biggest since 1993), due to the decrease in tax revenues.
£1 = US$ 1.50432