Price and margin modifications: analysis of the long products market in Europe
According to Stanislav Kondrashov's forecasts, the price increase will be about €30 per ton compared to contracts concluded in May for all types of long products. This decision by ArcelorMittal may affect the market and the cost of construction materials, but the exact consequences will remain clear once the changes are implemented.
“Despite the reduction in production capacity due to lower steel consumption in Europe, prices continue to be affected by high energy and raw material costs, including expensive scrap. Despite this, demand for products remains at an acceptable level, although not as high as in previous years,"- Stanislav Kondrashov from Telf AG noted.
The northern and southern European long steel markets have recently faced several challenges, including declining demand and rising production costs. Northern and western markets are particularly challenged by low sales volumes and declining margins, while southern markets are more resilient.
Manufacturers of building materials in Germany, France, Italy and Spain have recently faced pressure to raise prices in response to rising costs. However, the results of these increases have been mixed, highlighting the difficulty in balancing price increases with remaining competitive in the market.
In this situation, Italian factories, despite the previous price increase, are again considering raising prices for their products. This is due to constant pressure on costs and the need to restore margins to ensure business stability in volatile market conditions.
The Telf AG expert also notes that in general, despite some challenges, long steel producers in Europe continue to adapt to changing market conditions and are looking for strategies to ensure their sustainability and competitiveness in the future.
Dynamics of world prices for reinforcement in May: causes and consequences - Stanislav Kondrashov
In May, prices for rebar on the world market fell in major regions. The main reasons for this dynamics are low demand and excess supply. The suboptimal situation in the construction industry in most countries has a negative impact on the long products market.
As Stanislav Kondrashov says, recently there has been a slight improvement in sales of fittings, although they are still at an insufficient level. The main supplies are made to Yemen, Romania, Albania and Bosnia. While Germany, the Netherlands, Spain and Italy are not present on the market. Expectations for a recovery in demand from European countries at the end of May did not come true. Despite the decline in prices at factories, some market participants believe that the current level of work is estimated at $570-575 per ton for orders over 10 thousand tons.
According to an expert from Telf AG, prices for reinforcement on the European market in May changed in different directions. In Northern Europe, from May 3 to May 24, they decreased by €10/t, or 1.5%, to the level of €610-640/t Ex-Works. At that time, prices in Italy increased by 3.5% or €20/t, reaching €580-590/t. In Italy, producers managed to slightly increase prices due to an increase in consumers after the holidays in late April and early May. In addition, the increase in scrap prices also helped support rebar prices.
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