German steel mills are optimistic about steel prices

German steelmakers are expecting a slight increase in steel prices in the coming weeks, while traders and end buyers expect a stable price environment amid fears over automotive demand and large volumes of imported material, according to a monthly survey of German sentiment.

A poll conducted in late August and early September showed that the overall steel price forecast is 56, with the most optimistic producers at 67. Traders and distributors, as well as end-users, expect stable growth at 50 (50 means stability).

Sentiment on steel price dynamics gradually shifted from an overly optimistic 96 in May to more stable expectations over the summer as the summer slowdown swept the market. However, over the past two weeks, market sources have told S&P Global Platts that the auto industry's steel plant increases will be less certain due to a shortage of semiconductors that is forcing automakers to have intermittent production.

Market participants are currently mostly back from the holidays and it was heard that one European plant started offering hot dip galvanized coils in October, which was one of the most requested products during this year's material shortages. Previously, the plant was officially booked before the end of the year.

Sources said the material would help close the gap, and there were mixed opinions as to whether the volumes currently appearing in the spot market were large enough to affect spot pricing.