European Steel Plate Prices Drop Sharply as February Concludes

In the week ending March 1st, 2024, the price of Steel Plate observed a declining price trend in the European spot market as the demand from the downstream persists lowering the trend amidst price lingering price decline for the past few weeks. The buyers have maintained a cautious approach to the purchase of Steel Plate, even though the price trend dampens, as they expect further decline in the upcoming weeks. Meanwhile, the green steel market experienced an increase in supply as the major producers were using the electric arc furnace route, leading to an increase in domestic inventories. Moreover, the German Steel Plate manufacturers have been in talks with the labor union to resolve the prior issues regarding the final wages for workers. The market players are anticipating a continuation of the declining price trend in the German spot market as the demand buyers are circumspect to restock amidst a sinking purchase rate.

The declining price trend of Steel Plate was observed as the uncertainty in the market affected the purchase rate from local and overseas customers. European market players anticipated that significant Steel Plate manufacturers would decrease production soon if demand did not show signs of improvement. Interest in imported Steel Plate remained subdued because of extended lead times and uncertainties surrounding the quantities that could be allocated under safeguard quotas for the first quarter from foreign countries. The Steel Plate distributors across the European spot market are already overstocked and no further restocking is to be observed for the upcoming period.

Meanwhile, the demand from the downstream automotive and construction sector lacked interest as the weaker economic condition created serious concern among the Steel Plate manufacturers. European automakers and suppliers face challenges amid rising competition from cheaper Chinese electric vehicle (EV) manufacturers. They're under pressure to cut costs, particularly for EVs, to stay competitive. Suppliers, already strained by pandemic disruptions, fear further strain as automakers tighten budgets. Legacy suppliers like Forvia, Continental, and Bosch have announced layoffs. Small suppliers like Germany's Allgaier are at risk of administration. Automakers must balance cost-cutting with supporting suppliers, potentially resorting to bailouts. Larger suppliers can adapt, but smaller ones are vulnerable. This resulted in a shrinking consumption rate of Steel plate from the automotive and parts manufacturing sectors. Furthermore, there are expectations for a contraction in the downstream construction sector starting in 2024. Financial institutions have warned that the conjunction of elevated interest rates and rising building expenses has notably diminished the demand for new construction endeavors throughout Europe, affecting Steel Plate demand in the European spot markets.

According to the analysis by ChemAnalyst, the price of Steel Plate is expected to remain on a lower edge as the domestic supply rate would remain surplus amidst decreasing consumption from the downstream construction industries and the auto sector as the consumer market is anticipated to observe a stable market trend for upcoming weeks. The boost in the production rate of green steel has resulted in surged output of carbon-free Steel Plate in the European region, leading to a hike in domestic inventory level.