Day: 10 July 2023

Italian wire rod prices are stable on-month. Both sellers and buyers however continue to report low volumes. Some sales were achieved in June but with orders being carried out back-to-back. Sellers say they are playing it by ear and are reporting persisting low visibility, Kallanish notes.

The market is missing large volumes. All distributors and drawing mills are buying one or two truckloads per week. Producers are implementing stoppages and often supplying customers from stock. Price increases have been mulled but multiple sources say in this market any price rise would not stick, and the relative price stability is already considered a success.

For July, buyers have bet on price falls, but producers aim to hold on to current levels. Steelmakers may have to face higher production costs. Scrap prices are not falling this month in Italy due to shortages. The Italian government may end the tax credit for energy-intensive sectors such as steel and scrap the exemption from electricity transport and distribution charges. As Federacciai president Antonio Gozzi warned last week, this move risks increasing electricity costs in the country by 35% for steelmakers (see Kallanish 4 July).

Wire rod producers will now consider their results for the first half of the year. Based on their margins, volumes achieved, costs and government help, they will decide on their pricing, volume and production strategy for the months to come.

While some small restocking is expected in July and longer maintenance stoppages are planned in August, all eyes are on September which is nevertheless not seen bringing back significant sales volumes. Import prices at present are at domestic levels. Italian drawing-quality wire rod remains at €570-600/t delivered, sources suggest.

Natalia Capra France

Rebar prices have begun to recover in Spain after losing more than €50/tonne ($54.4/t) since May. The rebound is thought to be a measure by mills to bolster the market before their upcoming maintenance stops, amid stagnant international demand and uncertainty in the domestic construction sector, sources tell Kallanish.

“Last week, Megasa raised its price by almost €10-15/t for 16mm rebar. It was understood that the other main market players followed this increase,” a local source explains. “Levels fell more than expected since May and we are now observing a rebound, although not expecting to recover anytime soon the €50/t that was lost,” another market participant explains. “Demand for rebar is sluggish amid the construction sector’s lower production, so the mills’ upcoming maintenance stops could explain the rise in prices.”

The general expectation is that rebar prices will go up slightly further next week. Rebar is currently being sold domestically in Spain at €325-327/t ($353.91-356.03) base. Including €262/t size extras and €23/t loading expenses, the transaction value is at €610-612/t ex-works. Some offers have also been heard at €607/t delivered for 16mm rebar.

On the other hand, the Spanish scrap market remains quiet, with most collectors saying they are expecting the last price drop observed in the international market to soon materialise in the country.

“Last week, some collectors began to offer material, although in small tonnages, at lower prices than the rest of the market players due to a lack of liquidity,” says a trader. “The market expects prices to lose strength soon, matching international levels after Spanish collectors remained on the sidelines during the last downward movement seen in Turkey,” another source observes.  

New E8 quality scrap in Spain is offered at €395/t delivered. Type E40 and demolition quality grade E3 are sold at €385/t and €370/t, respectively. Meanwhile, E1 quality stands at €345/t delivered.

Todor Kirkov Bulgaria