After a slowdown during February, prices recovered their upward momentum. The full implementation of increases announced by the major domestic steel producers would result in the previous record high value being surpassed.

Buyers of strip mill products report continuing difficulties in obtaining material. Galvanised coil and sheet, in particular, are in very short supply. Despite fluctuating scrap values, the expectation of future steel shortages maintains upward price pressure.

Production at ArcelorMittal Italia remains restricted. The imminent threat of closure of the hot-end at the Taranto works has abated. Concern about the reliability of Liberty Steel, following the collapse of its main financial backer, adds to market uncertainty.

Delivery lead times for flat products, with the exception of heavy plates, now extend into the third quarter of 2021. Mills¡¯ offers are limited to contract business and regular customers only. This pattern is repeated through the supply chain.

The automotive sector remains a key consuming industry. However, the semiconductor shortage is constraining vehicle output.

Spring weather to boost longs market

Long product purchasers report good availability from the mills. Producers, however, advise that production schedules are fully booked. Nevertheless, space is available on imminent rolling programmes.

Reinforcing bar prices fell further in March, following a weakening in international scrap costs. The drop was much more noticeable in southern Europe than in the north. Spanish transaction values were in excess of €100 per tonne lower than those in Germany. Italian rebar prices exhibited a less marked but, nonetheless, substantial differential.

Building and construction activity is expected to pick up in the spring. Post-Covid-19 governmental fiscal recovery plans will stimulate demand. Conversely, a number of existing projects, planned with lower input costs, have stalled, following the recent sharp steel price hikes. A potential third wave of coronavirus could also inhibit short-term growth.

EC reviews safeguards

European steel consumers have become more vocal in their opposition to existing safeguard measures. They state that the material shortages within the EU demonstrate the need for a healthy import market.

At current inflow rates, however, quota volumes for all products researched by MEPS are forecast to be less than fully utilised, by the end of the quarter.

Import quotas are already exhausted for a small number of countries. The safeguard limits for other material, such as hollow sections from Turkey, were exceeded within the first days of January.

These factors will form part of the European Commission¡¯s deliberations as it reviews the measures.

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