‘Dead’ demand depresses long steel market across Northern Europe

Sentiment in the European long steel markets remained bearish regarding demand and price direction in both the short and long terms, with demand still “dead”, Fastmarkets heard on Wednesday February 28.

As a result of the unchanged market conditions, prices were largely stable.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €650-665 ($704-720) per tonne on Wednesday, widening downward week on week by €5 per tonne from €655-665 per tonne.

Market conditions were unchanged in the Northern European rebar market. A persistent bearish outlook and weak demand resulted in minimal volumes being traded, Fastmarkets heard.

But producers, reporting lost profits for most of the year, have become resistant to offering discounts.

“The market is depressed now because so few construction projects are going ahead,” a buyer source said.

“With environmental regulations that are constantly changing, variable raw material costs, high levels of bureaucracy, labor issues, high energy costs and high interest rates, investment has shifted away from construction in Germany,” the buyer source said. “There are no incentives to build so investors are moving away from construction projects. I cannot at this point say when demand might pick up or changes will happen.”

Market participants have begun to leave the industry due to the unfavorable conditions, Fastmarkets heard.

“From developers to cut-and-benders to construction companies, many key players are removing themselves from the market due to the situation,” another buyer source said.

Meanwhile, Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, was €650-660 per tonne on Wednesday, unchanged week on week.

Market sources reported weak demand, high logistics costs, and an overall pessimism.

High-stable scrap costs and high energy costs resulted in mills being unwilling to give discounts.

Fastmarkets’ calculation of its daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $390.27 per tonne on Wednesday, down week on week from $405.46 per tonne.

Published by: India-Inés Levy