French rebar buyers anticipate no market improvement in the near term and throughout the whole of the fourth quarter, Kallanish hears.
Current market activity is characterised by a lack of momentum, shown by orders with reduced volumes.
This week at the Irepas event in Paris, various European rebar makers expressed their apprehension about diminished sales and significantly declining earnings last year. Two sources anticipated negative results for this year as well.
The forecast for rebar sales and pricing through year-end appears to be unfavourable. There are expectations mainly from buyers of a decline in prices in the upcoming months, linked with decreased domestic scrap values and the subdued performance of international markets.
In France, there was a brief period of somewhat higher sales during the summer, but there is no optimism for the future, with distributors noting that sales are still sluggish and customers are reluctant to commit to large quantities.
The overall volume performance for the year has been relatively stable, with slow purchases occurring back-to-back amid uncertainty. However, downstream financial results showed weakness, with margins facing significant pressure and profit close to zero.
Buyers insist on taking a cautious approach, and the market has only slowly resumed activity after the August break.
Rebar prices remain stable month-on-month in France, averaging at €610-620/tonne ($681-692) delivered, according to industry sources. In September, scrap prices in western Europe experienced an on-month decrease of €25-30/t, reflecting the downturn observed in the Turkish market.
The domestic construction sector is in the middle of a recession, as confirmed recently by national construction body Fédération Française du Bâtiment (FFB). However, sentiment among French construction companies improved slightly in August. According to L’Institut National de la Statistique et des Études Économiques (Insee), construction companies active in both structural works and finishings reported a slightly more positive business climate and an improved attitude towards their future (see Kallanish passim).
Natalia Capra France
