German flat product steel prices rise over 8 percent in February

Demand has picked up and delivery lead times are extending. However, lack of availability, caused by output restrictions, has been the main driving force for price hikes.

Mill production problems
A combination of mill production problems, higher slab prices and some stock replenishment, have helped boost commodity plate transaction values. German steelmakers are more or less fully booked and will be looking to increase prices further in the second quarter.

Buying activities
Cold rolled coil buying activity has increased, ahead of ever escalating basis values. Recent negotiations for late first trimester contracts have resulted in significant increases. Selling figures have climbed approximately 9 percent in the last month and are predicted to strengthen further in the near term.

Well performance in the auto sector
There have been substantial gains in galvanised coil basis figures and the mills are anticipating higher numbers for the second quarter. The majority of the German auto sector is still performing well but manufactures are cautious about the quantities of steel they book in.

Hikes in German steel selling values are likely to be accepted in the short term due to improving demand, mainly as a result of tightening supply and restocking in the market. Moreover, iron ore costs are predicted to climb in the short term due to seasonally higher global crude steel production. This will, almost certainly, add to the upward movement in transaction values.