Scrap and billet sales in Southern Europe and the Mediterranean area are under pressure from significantly lower volumes this month. Market uncertainty and the global economic slowdown are impacting the volumes of transactions, trading sources tell Kallanish.
Black Sea billets are being offered to Northern African countries such as Tunisia, Algeria and Egypt at $440-445/tonne cfr. Transaction prices this month for CIS billets and billets from Italy are at an average of $420/t fob but sales volumes in June, July and August have been extremely low. Northern African economies are also slowing down, sources suggest. This is causing Northern African buyers to be extremely careful with their purchases and creating unease in European and CIS billets sellers, Kallanish hears
Other semis purchasing activity in northern Africa is considered as extremely slow. “Buyers are adopting a wait-and-see attitude also because they have received cheap semi-finished products from European countries in recent weeks. As Europeans don’t sell high volumes in their domestic markets, they have sold cheap material on the export market. We have noticed payment issues in Northern Africa. Some large customers have resorted to delaying delivery because of payment problems,” a trader says.
September may see some price increases in the semis market due to recent high iron ore prices but volumes and the quantity of transactions are not seen improving in the first week of September. Export/import activity within the Mediterranean area is forecast to continue to be under pressure in the fourth quarter, Kallanish hears.