Steelmakers Struggling to Implement Price Hikes
MEPS research, in March, indicates that a number of parallels have developed between the North American and European flat product steel markets. Due to rising mill input expenditure and a projected pickup in activity, steelmakers are targeting higher prices. The mills’ measures are having limited success, to date – although they have halted further price deterioration.
MEPS predicts that North American and European selling figures are close to the bottom of the current pricing cycle. However, the steel manufacturers are unlikely to secure the full extent of their proposed increases. This is because demand fundamentals are not strong enough to warrant the scale of the hikes proposed. Relatively short delivery lead times and above average inventory levels are projected to curb the mills’ pricing aspirations.
North American and European steelmakers have a small window of opportunity in which to push through their list price proposals. Reduced demand, during the traditionally slower summer period, is expected to exert downward pressure on steel figures. Consequently, MEPS predicts that any upturn in transaction values is expected to be modest and short-lived.