The comment comes after research by consultants MEPS of Sheffield who say that the mills are embarking on a programme of production cuts and, more importantly, many foreign suppliers are restricting output for sale into the EU market.
The forecast from MEPS is for steel prices to strengthen if both foreign and domestic mills continue to decrease their supply to the market, although the “change” point will vary depending upon the product form.
While the EU hot rolled coil market is near to equilibrium, the cold rolled sector is seen as continuing to be oversupplied.
MEPS says: “Most negotiations over the next few week will probably result in further reductions. Many customers still have outstanding orders for delivery over the next three months from non-EU sources. However, several of these suppliers are reducing their order intake and requesting higher prices. This action, together with local production curbs, is likely to transform the market from excess to shortages in the near term.”
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