Rebar prices rose in Spain and narrowed upward in Italy in the week ended Wednesday July 20; energy cost increases combined with continuing uncertainty around potential energy shortages in the fourth quarter have compelled mills to raise prices, sources said.
Solid demand has made buyers more accepting of higher prices, thus reversing the price downtrend for rebar in Southern Europe.
Demand remained good in Italy, with some buyers stocking up before summer holidays begin in August. However, a wait-and-see attitude continued to prevail, Fastmarkets heard.
Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €860-880 ($878-898) per tonne on Wednesday, narrowing up by €30 per tonne from €830-880 per tonne the previous week.
Despite demand remaining solid, significant uncertainty remains, Fastmarkets heard.
“Demand is still good these days, but it seems to decrease a little day by day. It is possible that customers are waiting to understand what the price will be at the end of July or the beginning of August before deciding to buy,” a source said.
The same source said mills are holding off taking large volume orders, fearing that energy costs will begin to rise in August.
“We think that the price could increase again before the holidays, and maybe it will remain high till the first half of September,” the source said.
However, with so many extenuating factors – including extreme weather situations and energy cost surges – the rebar market in Italy may not follow a conventional pattern, Fastmarkets heard.
Energy rationing, proposed by the European Commission on July 20, would add further upward pressure to energy prices, forcing mills to increase prices and potentially cut production, sources told Fastmarkets.
Emergency legislation, designed to protect countries from the possibility of Russia weaponizing gas supplies over the coming months, would enable the EU Commission to impose 15% binding gas consumption restrictions on EU countries over the next two years.
If passed, each country would have to decide how these cuts would be imposed.
Despite the fact that domestic scrap prices declined significantly in Italy month on month in July due to lower demand from mills, these decreases were not nearly enough to offset energy costs, a second source told Fastmarkets.
Buyers have become more accepting of price rises amid surging input costs, sources told Fastmarkets.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €780-800 per tonne on Wednesday, up by €20 per tonne from €760-780 per tonne the previous week.
Spanish mills have begun to raise prices to compensate for increasing energy costs, sources told Fastmarkets.
Offers from mills were heard at €820-850 per tonne, indicating mills plan to continue raise prices, although buyers are not currently accepting this price level, sources said.
Decreasing international scrap prices since mid-April have been a major factor in the falling rebar market. Despite prices surging in early July, they have recently fallen again.
Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $382.50 per tonne on Tuesday July 19, down from $398.49 per tonne the week before.
Published by: India-Inés Levy