MEPS Intl. reports continued price weakness and an environment of increasing Asian price competitiveness in the German steel industry.
If anyone wants to remain in good Happy New Year's cheer, suggest don't read any further:
Hot rolled coil basis figures have softened in Germany, according to the latest report by MEPS. Expectations for next year are poor as the economy is not performing as well as anticipated. There is little confidence in the marketplace. The pipemakers report reasonable activity but their margins are being squeezed by growing overseas competition, particularly from China.
In the commodity plate market, service centres are buying only what they need to cover immediate orders. They have been keeping inventories under control for some time and, now, many are destocking. Steelmakers are starting to lose some of the gains made at the end of the third quarter, partly due to intense import pressure.
Distributors are pushing for cold rolled coil price cuts on the back of softening raw material costs. Domestic suppliers have reduced their offers. There has been no revival in demand. Construction-related demand for hot dipped galvanised coil is static.
The auto industry is holding up, although sales of cars to Russia have dropped sharply in recent times.
Basis numbers in the general market have succumbed to downward pressure, due to oversupply. Mills have maintained their low carbon wire rod prices again this month but customers are calling for decreases.
Recoil values have succumbed to negative pressure from declining scrap costs. In addition, the finished mesh market is very competitive at present. Structural section sales volumes are poor where there is strong competition for the little business that is available. Nevertheless, suppliers have held on to prices during recent deals but some slippage could occur in the first trimester.
The rebar market is very competitive. Buyers have successfully pushed for lower prices as scrap values continue to drop and further decreases cannot be ruled out in a climate of subdued demand.
Steelmakers have failed to resist customers’ calls for merchant bar basis price cuts, for the third consecutive month. Purchasing activity remains cautious as buyers monitor the constant negative trend. There has been no recovery in business levels.
Wow this is pretty depressing... I don't see a major recovery in the EUR/USD until we see the general negative context of a diversity of European commodity reports like this do a 180; and European firms are in a power position where they are able to start increasing their real terms of trade with US firms.
Euro just hit a new 4 1/2 year low vs. the USD Reuters reports here.
(Reuters) - The euro fell to its lowest in 4 1/2 years against the dollar on Friday after the head of the European Central Bank fueled expectations it would take bolder steps on monetary stimulus later this month.
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