Complete Steel Collection
Newsletter March 2009
- EU average steel prices - latest forecast
A further steel price reduction for the flat products sector has been forecasted. Demand during the first half of 2009 is likely to remain low and the customers are expected to continue de-stocking. This could be exacerbated by potential problems with bank borrowings, delayed payments and expected bankruptcies, especially among auto related clients.
The average prices of HRC dropped more them by 20 €/t, for HRP there was even decline by 60 €/t. The decrease of steel production should bring price stabilization during 2Q 2009. The recovery in transaction values for all flat products will be delayed until the second half of 2009.
Government stimulus packages may take several months before they generate an increase in steel demand. The reductions in the raw material contracts of steelmakers for 2009 could also lead to declining product prices during the second quarter. The slight return to regular orders is anticipated by the third trimester. This should push the steel prices higher. The extended poor economic situations and the low demand should decline the average price for long products over the next few months.
Weakening scrap costs, coupled with poor demand from the construction sector, are likely to reverse the previously anticipated upturn in selling figures.
There is also strong influence on Long Products prices due to exchange rate CZK/EUR and CZK/USD in the Czech Republic. The Czech traders sell the material from the stocks reserves with the 5 – 7 CZK/kg loss.
Prices for all long products are forecast to climb in the second half of 2009. However, end user consumption is likely to remain depressed throughout 2009. Consequently, transaction values may not move to figures considerably above current levels before 2010.
18. March 2009, Zdeněk Dostál, Purchase Director TENZO Group
- Polish steel market in March
The situation on Polish steel market has not changed much from the month of January to March. Practically the same issues are noticed.
The most significant characteristics of present steel market environment in Poland are as follows:
1. All distributors still look at continuing reductions in turnover, which sometimes reach even 50% in comparison to year 2008. Some of them begin to have liquidity problems.
2. Companies using heavy steel products observe considerable fall in orders and postpone realization of orders until later.
3. Significant investments in construction industry are still postponed with declaration of resumption, when economic upturn appears.
4. Banks are still tightening their risk appetite and credit policies. They delay granting of new credits and try to speed up repayments of the existing ones.
5. Very strong competition is noticed practically in all fields of TENZO activity i.e. sale of steel parts, steel material and welding products. Nowadays price is the decisive criterion.
6. Producers are still operating with reduced production capacity. In some cases they try to increase prices of products. On the other hand, there is no information about any significant changes in price of steel material.
7. The period when market expects improvement in business activity is postponed until a later. Slight improvement may appear during the turn of 2nd and 3rd quarter.
18. March2009, Waldemar Lisoń, Managing Director TEPL
- Romania Mittal Factory to Reduce Operations!
Steel producer AM will substantialy reduce business activities at its Galati plant, Eastern Romania because of the largely worsened sentiment in the steel sector generally. Starting April Galati plant will make temporary (several-wave) lay-offs for the period of three months, a local union official announced on Friday, 13th of March.
Arcelor Mittal employs 12,500 people in Romania.
A growing number of Romanian companies are experiencing cash flow problems and have begun to announce plans to reduce activity or to cut jobs. The government estimates that around 50,000 people will lose their jobs this year, with the job cuts coming mainly in construction and agriculture.
A growing number of Romanian companies are experiencing cash flow problems and have begun to announce plans to reduce activity or to cut jobs. The government estimates that around 50,000 people will lose their jobs this year, with the job cuts coming mainly in construction and agriculture.
Romanian government is negotiating with IMF loan of 20 billions of EURO, which mean that Romanian economy will face new conditions.
Steel consumption decreased with more than 50% in comparison with 2008 and is not the end, mainly in constructions. The very first companies affected are the ones which used to produce for export as they are now facing order cancellation, or they have no order for year 2009.
Prices are continuing to go down, the Italian producers are now indicating prices of 450,00 EUR/T, heavy plates are from between 515 EUR/t up to 605,00 EUR/t, EXW mill.
18th March 2009, Monica Stroe, TERO Sales Director
- Slovak production declines!
The previous downward trend in industry at the end of 2008 accelerated in January, the Slovak Statistics Office announced on March 9. The industrial production index decreased by 27 percent year-on-year in January and reached the lowest value since the introduction of the new index in 1999.
Experts say the overall drop in industrial production is mostly due to the 32.7 percent year-on-year (y-o-y) fall in manufacturing. Production decreased in all sectors of manufacturing. The Statistics Office registered the highest decrease in production of cars and other transportation vehicles.
US Steel branch Košice cancelled a lot of external contracts in engineering sector. The indicator of decline in this respect is consumption of welding material which has dropped more than 40% since January 2009. VSS Košice has stopped production since March 2009 and it might stay discontinued till new contracts will be signed.
18. March 2009, Pavol Horák, Sales Director, TENZO Slovakia
