Euler Hermes increasing UK steel exposure

Credit insurer Euler Hermes increased its exposure to the UK steel sector by 5pc over the 12 months to February 2019, despite the price rundown over the second half of last year and ongoing Brexit uncertainty.

Euler Hermes is committed to the sector despite the well-publicised headwinds, with Brexit threatening just-in-time supply chains and potentially UK steel consumption, the company told Argus.

The company admitted cover to certain buyers could have fluctuated, but its overall risk appetite was up, despite mills suggesting automotive sector steel demand being down by 5-10pc and potentially falling further.

Some in the market have said that credit insurance, which covers suppliers in the event that their buyers do not pay, is being reduced given the uncertain environment and a host of company-specific issues.

Coface said it reduced its overall UK exposure by 12pc last year, while QBE declined to comment and Atradius did not return requests for comment.