In recent months, mills have pursued an aggressive pricing policy in an attempt to attract the few available orders and thus increase rolling mill prices. Volume discounts were offered for relatively small quantities. However, buyers waited in anticipation of further discounts.
The shortage of mill orders led major mills to approach end users outside their normal customer base directly. This did not go down well with distributors and service centres, which were already struggling with excess stocks.
Europe's leading steel producer wrote to its customers on 1 July recommending an increase of €30 per tonne for its long product range. A similar announcement is expected shortly for flat products.
Distributors and their customers do not seem convinced that this change of tactics will be successful. Inventories remain high compared to current utilisation. With the holiday period approaching, buyers can afford to wait and reassess the market after the holidays.
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