UK based MEPS said that the relentless upward movement in EU prices continues and customers are obliged to accept the new higher third quarter values demanded by local producers. MEPS added that “Prices of imported strip into Europe are still increasing this month, although less material is entering the region. There is relatively little steel from China due to the pending anti dumping investigations. Output from domestic mills for July September deliveries appears to be restricted.”

MEPS said that “Demand from end users in Germany has slowed slightly because they are not sure they can pass on their increased costs to their customers in a weakening economic climate. Although service centers are making good profits at present, they are keeping stocks down. Third country imports are available, albeit not always at attractive prices. Buyers are not keen to place orders for deliveries so far ahead when they feel current prices are probably at their peak for this cycle.”

MEPS said that “In the French market, inventories are quite low and not expected to recover in the near term because of a lack of overseas availability and restricted supply from domestic sources. Prices continue to increase for third quarter deliveries. Sales are only average, although demand from the auto sector has improved.”

MEPS added that “Strip mill prices have registered further sizeable rises in Italy this month and the trend is expected to continue to the end of the summer as import volumes drop away. As hot rolled coil prices escalate, they are pushing the rest of the flat products with them. Stocks are depleted at present because customers are reluctant to risk losing money if the price trend goes into reverse.”

MEPS said that “Corus has stated that it will lift basis prices for quarterly contracts in mainland Europe by EUR 130 per tonne from July 1st 2008 but so far, no official announcements have been issued concerning the local market. Sales at home are lackluster. However, customers have fewer options on supply because of a lack of third country imports and much smaller quantities than usual on offer from other EU suppliers. There has been no speculative purchasing ahead of the period three price advances. Negotiations are underway and it is clear that prices will rise markedly. Our tabled figures are the results of early deals and values could go higher as more business is concluded.”

MEPS added that “Steel consumption is still quite good in Belgium, although the domestic appliance sector is starting to show signs of weakness. Market players are concerned that the second half of the year could prove to be more difficult as prices may have almost reached a level that the market can no longer support. Stocks at the service centers are on the low side of normal due to tight credit, delayed deliveries and mill restrictions on supply. Distributors are able to pass the higher mill prices to their customers. End users are keeping inventories to a minimum. Third country material is absent and the European mills are reported to be selling large tonnages overseas.

MEPS also said that “In Spain, general demand is stable. However, the auto sector is still reducing order volumes and construction activity is particularly weak as ongoing projects are completed and new ones postponed or cancelled. Availability from European mills is constrained, with smaller clients suffering the most.”