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Article Excerpt
Much like in North America, raw material shortages and rising exports to Asia have caused a finished steel shortage in the European Union, forcing prices to escalate as mills close their third-quarter order books. Long-term, growth of the union from 15 to 25 nations should provide freer trade and greater opportunities for steelmakers around the globe.
Steel mill prices throughout Europe continue their upward surge this summer along with steel demand, as European countries enjoy their own economic rebound.
According to British industry consultancy MEPS International Ltd., "All the EU mills will go for higher prices in the third quarter."
European crude steel output increased 3 percent in the first quarter at an annualized rate of 220 million metric tons, vs. 213 million tons in the first quarter of 2003, according to World Steel Dynamics' May 13 Global Steel Alert report.
The continent's actual consumption of hot-rolled band in the first quarter was up 6 percent to 119 million metric tons (annualized) vs. 112 million tons in the first quarter of 2003. Hot-roll imports were up 7 percent compared with the first three months of 2003, while exports fell 4 percent, WSD reports. In long products, Europe's actual consumption in the first quarter was up 3 percent from a year earlier. Imports and exports of long products were both flat from first-quarter 2003 levels.
London's CRU Group reported June 8 that Western European flat-roll mills are filling up their order books for the third quarter, with "selling prices at vastly higher levels than the current quarter."
WSD says the key factor stimulating the strong market in Western Europe "appears to be the significant steel mill production restraints due to raw material shortages." As of May, "some of the major steel mills are so short of hot band that they are purchasing it from Brazil and China--at price levels higher than some independent service centers and processors are willing to pay." And this is in spite of ocean freight rates that have doubled and tripled since early last year.
European prices for stainless products, carbon steel structural sections, rebar, wire rod and bar products all went higher in the first and second quarters, according to CRU...
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