Bearish sentiment inhibits trading in Southern European long steel market

Most market participants returned to Southern Europe’s rebar and wire rod markets in the week to Wednesday September 6, at the end of the summer holiday slowdown, but trading remained subdued due to mixed sentiment and weak demand, sources told Fastmarkets.

But while some were bearish and forecast a short-term decline in prices, others said demand, and therefore prices, would rise steadily through September as restocking activity picks up.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €645 – 655 ($692-703) per tonne on Wednesday, narrowing downwards by €15 per tonne from €645-670 last week.

If demand does not rise, steel mills could intensify output cuts, Fastmarkets understands.

“During the coming week, and the next one, rebar prices may continue to decrease because the market is flat, and exports are very low,” a buyer source said.

And a producer source told Fastmarkets little would be happening in the short term:

“The market is still asleep from the summer holidays,” the source said.

While market conditions may not support immediate price rises, producers remain reluctant to reduce prices further.

“[Prices] cannot move down further,” a second producer source said. “Prices are already heavily below production costs [and] any further decreases would unavoidably push mills to stop production [to avoid further] losses because they are already too big.”

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €640-650 per tonne stable week on week.

In the Southern European wire rod market, meanwhile, prices were also unchanged amid subdued trading activity, sources said.

And Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, stayed at €580-600 per tonne on Wednesday.

Published by: India-Inés Levy