German rebar mills have this week communicated another price leap that will take their base prices to around €500/tonne ($561). Including the average size extra of €265, rebar could now be offered at as much as €765/t delivered.
“We had a quite turbulent two weeks,” one central German manager tells Kallanish. In this time, mills lifted their offers in two steps by a total of €70-90/t, depending on the earlier base prices achieved, which a month ago were still at €410-430/t. In addition, with effect from 1 November, mills lifted the surcharge for wire mesh for the first time in 15 years – by €25/t.
In October, Kallanish heard from one mill source that “the price level in Germany is now rising steadily, driven by clear cost increases for all producers.” Many buyers say they had been forewarned last week by the mills that prices would climb further, but were still taken by surprise by the size of the hikes.
According to the buyer of a large distribution group, energy costs are the mills’ prime argument for the hikes, especially for mills that depend on the spot market for power supply.
What remains unclear is the attitude of Italian mills towards their German customers, with respect to a pricing anomaly observed one month ago. In the first half of October, their base price offers to Germany, around €420/t, were much lower than those offered to domestic customers, at €480/t.
The result of this is unclear because Italian mills have left the market this week. “I’ve reached out to them, but they need to sort out the picture for themselves before making a move,” the buyer says.
Another manager notes: “The Italians are now following the German prices. Actually, the Germans are following the Italian prices; you can look at it both ways.”
