After a “… relatively good” July and a still “… decent” August, sales of Germany’s stockholding steel distributors in September fell below expectations, Kallanish hears from stockholders’ federation BDS. Its chief economist Jörg Feger describes a downward spiral of stagnating demand combined with a “… sneaky” deterioration in prices for raw materials and steel. This erosion has gained noticeable momentum since the summer, Feger says.

With 920,000 tonnes of rolled products sold, the volume was -4.6% down on the previous September. In the first three quarters of the year, sales were also -4.1% lower than in 2014. The reason for buyer reservation is not necessarily reduced activity in end-user sectors, but rather a wait-and-see attitude, as buyers speculate on prices falling further, BDS believes.

The gulf between a decent level of business in many areas of manufacturing in Germany and the stagnating sales of steel distributors was addressed at federation’s members meeting last week in Bremen. Andreas Schneider of analysts StahlmarktConsult noted that “… we are somewhat in the dark as to why that is,” and that that a drop in virtually all product groups had not been anticipated.

While inventories were reduced July and August, the depletion continued for flat products in September, while long products saw some replenishment, BDS chief economist Jörg Feger adds. At the end of September, inventories stood at 2.34 million tonnes, -7% lower than one year ago. In terms of days of sale, inventories at 75 days were on par with last year’s level.