London — German flat steel stocks dropped further in January, continuing a 33-year low, while long steel stocks picked up slightly, figures by German steel stock association BDS have shown.
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Although the pace of the month-on-month drop slowed in comparison with the change from November to December 2020, German steel stocks are alarmingly empty and a result of the ongoing material shortage in the market.
Flat steel stocks decreased 0.8% on the month to 1.4 million mt in January, seeing a 7.2% year-on-year drop.
Long steel stocks increased by 4.7% on the month to 748,387 mt, recording nevertheless a 9.3% decrease on the year.
Typical for the time of year, sales volumes increased sharply as December is usually a slow sales month. Flat steel sales jumped 53% from December to January to 575.901 mt, still falling 3.5% behind last year's January.
Long steel sales also increased significantly by 33% month on month to 244,949 mt, down almost 13% however in a year-on-year comparison.
German steel distributors have had a busy start of the year with buyers turning to distribution rather than mills as lead times from European producers remain -- at 12 weeks or more -- unusually long as the steel shortage continues. Ramp-ups by European mills with blast furnace production are expected to have an easing effect on material availability by end of Q2, according to sources.
In the case of flat steel, however, material in stock is also getting low, leaving buyers in desperate need, while import opportunities remain scarce.
The shortage has been reflected in steel prices as the daily Platts HRC assessment continues at a 13-year high of Eur730/mt EXW Ruhr Feb. 24.