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EU sections buying remains slow - 28 May 2012

European sections prices have been unchanged since the first two weeks of May when producers announced new increases. Buying remains slow and stockists complain that the weak construction sector has cut margins, Platts Steel Business Briefing learned from market sources.

In Germany and Benelux category one sections are still available at €615-620/tonne ($770-777/t) delivered to stockists for June delivery. “If we buy at €620/t delivered, we are going to sell to our final end-users at €650/t, making only €30/t of margins… that is crazy”, a north European distributor said. The uncertainty in the economic situation has also affected orders, sources in the region note. Merchant bar base prices have been lowered in the area to €260/t delivered.

In addition to the poor demand and the difficulty of stockists and buyers to make margins, softening scrap costs in Germany have led to expectations that sections prices could drop.

In France market participants have noted that the month of May has been very quiet compared to the same period of last year. Here category one sections are reported to be at €605-610/t delivered.

The global economic uncertainty is affecting mainly the south of Europe where even large stockists are continuing to buy only what they need. In Italy and Spain section prices are reported respectively at €600/t ex-works and €590-600/t delivered.

 

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