With the introduction of monthly pricing in the steel market in 2005, the exciting price movement in the steel market is long overdue. For those accustomed to the highly volatile market, the period so far this year has been striking, with steel prices soaring in March and April that neither the construction sector nor the machinery sector can tolerate it.
As a result, many players stopped their various investments, and machine manufacturers did not place enough orders, which led to a significant drop in demand for steel, which led to another fall in prices.
In January, so far no one was guessing
However, the start of the European steel market was very slow at the beginning of the year. At the beginning of 2022, no one expected a war to break out, but when that happened, Europe began to panic. Everyone feared that there would be a shortage of steel products, and some companies made purchases, as a result of which they kept stocks for months.
In other words, the demand was higher than the stock, which led to the doubling of the prices of some commodities, such as the rough plate.
He told the portfolio Roland Ferda, Steel Trade and Production Manager at Épduferr Plc. He added: “The factory price of the product in January was € 920-950 per tonne, which had already reached € 2,200 when ordered in April. No materials required.
So customers were in stock in the first months of the year and, like users, the market was completely closed.
There was a panic in the opposite direction, as prices plummeted, the price of coarse layer fell to 1,600 euros in a matter of seconds, and the price of reinforcing steel fell to 1,200 to 1,300 euros.
They have not been ordered yet
According to Roland Ferda, new, substantial orders will not appear to manufacturers unless previously accumulated stocks are used by users. According to the expert, manufacturers make the mistake of reducing their prices so that they can maintain continuous production even with certain orders.
However, there will be no more orders due to low prices.
The price of steel products in Europe is guaranteed to be very high, but this sharp decline is not justified as the energy consumption of the steel industry is relatively large as energy prices have continued to rise since last quarter.
You can defend against it
In the case of dupduferr, the overall picture is positive in many respects. “Fortunately, we bought at the right time, and unfortunately the steel industry has become more fortunate recently than ever before.
More factors are causing turmoil in the market than in previous years, further worsening market forecasting.
Nevertheless, in recent times we have been able to complete our purchases and sales at a good pace and at a good pace, so we expect to meet our returns in six months for this year, ”said Ferda Roland. The market was a different problem. “Demand is increasing now as our inventory continues to fall and demand is declining. We can sell our products at a stagnant level and continue to sell from July to August. You have to refund the extra you get,” the manager said.
The declining trend, the added value
Speaking about the future, he said:
It is difficult to estimate which direction the market is moving, but now we can see that steel consumption is declining in many countries, so the order backlog is gradually declining.
“The Chinese economy is also declining, affecting the entire global market. At home, construction orders soared in the first quarter.
However, in the second quarter, we found that both retail and other key investment declined or stalled.
There was a general reaction from the people to postpone or stop construction altogether. A family home needs at least 10 tonnes of reinforcing steel, it does not matter if the builder can buy it for 4 million forint or 8 million, ”the expert said.
So pduferr plans to reduce its purchases, to use existing inventory in the next 2-3 months according to market and market. New processing equipment has also come to the company to some extent, enabling the company to carry out further processing of steel products, primarily sheet products, on contract basis or by accepting various orders.
Instead of the usual steel trade we now need to increase our services and be able to maintain orders consistently through processing.
Trade is an ancillary process through which we can get our raw materials for processing at the right price.
This article was published by pduferr Nyrt.