The ongoing market downturn may force steelmakers to shut down or sell some capacity
European long products producers are under serious financial pressure, Kallanish reports, citing sources at steel mills.
If the market downturn continues and there is no government support, this could potentially force producers to close or sell certain facilities. Low profitability and high costs continue to have a negative impact on production in both southern and northern Europe.
Producers of long products point to high electricity costs and rising scrap prices. In particular, they are resorting to measures such as production cuts and night shifts to save on electricity.
Current selling prices for long products are unstable and difficult to increase, said one market source. According to the source, sales of wire rod and rebar are experiencing a decline across Europe, with both types of products currently performing poorly. In particular, sales in Germany continue to decline in terms of volumes and prices.
European rolled steel producers in southern Europe are considering stopping production as a strategy to cut costs and minimize scrap purchases.
Current indicators do not indicate a recovery, so the market expects that 2025 will reflect the current year, albeit with some adjustments. However, demand may recover in the second half of next year.
One of the long products producers with facilities in several European countries suggested that the market may structurally decline in the long term.
The European steel distribution sector is also under pressure. According to sources, a large number of service centers across Europe are facing difficulties and may potentially cease operations.
As reported earlier, in October 2024, the global rebar market showed different price trends depending on the region. In Turkey, prices rose amid rising scrap prices and stable demand in the domestic market. At the same time, the US saw negative price dynamics due to weak demand caused by economic uncertainty. The European market was under pressure from growing competition from imported products.
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