EU flat product steel prices hit record highs

Edited by the Engineeringtalk editorial team Jun 22, 2004

Prices for flat rolled steel products in Europe have now in most cases reached their highest level in the last two decades, says MEPS (International).

Prices for flat rolled steel products in Europe have now in most cases reached their highest level in the last two decades, says MEPS (International).

The company's records, going back over this period, show that the previous peak for most categories was reached in the mid- or late-1980s.

Since that time there has been a gradual and far from uniform erosion of prices.

The upturn of the present cycle began in early 2002, but then lost a little ground as a result of the market uncertainty caused by the outbreak of SARS disease in Asia in 2003.

But the explosion of prices since then has driven the value of flat steel in Europe to its current record high.

The following analysis looks at the German steel market, Europe's largest and discusses transaction prices.

These are basis prices plus the extras applicable to the cheapest grade of steel (sometimes known as "normal commercial quality") in standard product form and the most popular size range.

Historical prices have been converted into Euros.

For hot rolled coil, the previous top point since MEPS began collecting data was in late 1984 when it reached the equivalent of Eur 420 per tonne.

The historic low point was reached in early 1999 (Eur 209 per tonne).

But the current price at the bottom end of the range, Eur 465 per tonne, is the greatest on record.

In hot rolled plate, the previous high of Eur 427 per tonne was reached in the spring of 1985.

The low of Eur 240 per tonne was attained in early 1999.

And the current record value is Eur 515.

These hot rolled flat products have shown huge%age increases in price since they stood at their bottom points - 122% for coil and 115% for plate.

Cold rolled coil has seen a similar development, but to a less dramatic extent.

Cold rolled coil in the German market touched its previous pinnacle of Eur 518 per tonne in mid-1985 before sliding to a record base of Eur 325 in early 1999.

The latest surge has taken it up to a historic high of Eur 548 per tonne - a rise of "merely" 69%.

In coated sheet the picture is somewhat different.

Hot-dipped galvanised is the only strip product not to have reached a record price this month.

Its current value of Eur 603 per tonne is up by 68% from the low that it reached in early 2000.

But it remains some way below the zenith of Eur 658 attained in the autumn of 1989.

That peak was reached at a time when automobile manufacturers were plunging headlong into the use of galvanised sheet instead of uncoated sheet in order to offer their customers improved corrosion-resistance warranties.

A shortage of galvanising capacity developed and prices roared ahead, before the producers caught up with demand and prices drifted down from those top levels.

Electro-zinc coated sheet stands at Eur 590 per tonne this month - which just beats its previous best of Eur 584 per tonne in late 1995.

Electro zinc's low point of Eur 395 per tonne occurred in early 2002.

All the signs are that mills are booking third quarter orders at prices which for many products are substantially higher than those of the second quarter.

So it may be too soon to close those record books and put them back on the shelf.