According to Eurofer, 2019 itself was not the best year for European metallurgy, a 5.3% decline in steel consumption in a weak manufacturing sector and record high levels of imports are driving down prices, leading the European Commission to strengthen its import guarantee system … Early forecasts suggest that this year will be much worse: MI analyst Ronnie Cecil said in a webinar on May 14 that he expects EU steel production to decline 10% to 141 million tonnes, just over 139 million tonnes from the 2009 economic crisis.
PRESSURE STEEL PRICES
The ongoing recovery in steel prices in Europe in early 2020 after losses last year has been unequivocally curtailed by the pandemic.
European finished steel prices are declining due to continuous declines in demand, despite the push of key consumer markets. EXW Ruhr Hot Rolled Coil price – a benchmark for flat products heavily influenced by automatic shutdown – has dropped by about 11% since the beginning of March to EUR428.50 /t ($ 463 /t). Northwest European factories have tried to hold down supply prices and sought buyers outside of Europe, but in recent weeks they have had to make concessions.
More and more competitive offers of imports from the former Russia and Turkey for flat products are putting additional pressure on price levels in Europe amid falling demand.
Downward trends were also observed due to weak demand for structural steel, although import quotas for rebar for some countries, such as Turkey, have been exhausted and European buyers have to look more for materials in the domestic market. Rebar prices fell further after the intermittent price hike in late March as scrap shipments declined due to restrictions on scrap export. While European scrap strengthened again after a slight drop in late March, rebar did not follow the move and fell 4.2% since early April to 455 EUR /t EXW NW Europe, according to rebar’s weekly valuation.