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Monday Market Monitor - EU (WEEK 32) - Prices continue to go up - 11 َAug 09

Despite the summer holiday season, the factors influencing previous week continued to work last week. There was an overall growth in prices across the products in Europe last week resulting from a spurt in demand from the stockiest to replenish their inventory. However, supply shortage remained an impediment. Moreover bulk quantities have been sold to greener havens of China and India. The combination of such factors has led to growth in prices recently.

As a result, both import offers as well as domestic offers in Italy, Germany and Spain increased by EUR 10 per tonne to EUR 20per tonne for most of the flat products.

It is true that the number of enquiries in the market has gone up but they are mainly for specific qualities and dimensions to complete the assortment.

Different signs of slightly improved overall economic situation are slowly but constantly changing the feeling of the operators which can be determinant in driving towards a more positive approach and thus to decide for a more aggressive purchase policy.

However, it is not exactly clear whether or not the situation has definitely improved. People are still afraid of sudden and un predictable changes and they do not want to take too long steps that could be fatal. However everybody agrees that, most probably, the worst is gone and that is now a question of time to get back to a normal situation.

On the other side, demand is still low and weak as major industrial sectors such as car and white products are still suffering of quite important sales fall. The advertised realigning of BF's will increase availability and thus offer will become less tight. In case demand will remain at present levels, we expect a price decrease during the next months. Prices will not go back to the minimum reached 4 months ago but certainly will not be able to resist to a corrosion of some tenth of EUR vs USD.
Aug 11, 2009 10:32
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