Demand remains flat in steel rebar markets in Italy, Spain

Market fundamentals remained weak in the Southern European rebar market in the week to Wednesday November 30.
Subdued demand and an uncertain outlook continued to inhibit trading activity.

Input costs such as scrap and energy prices have risen through late November. Further price declines would result in prices becoming unworkable for mills because producers would be selling below cost, Fastmarkets heard.

Most market participants said that they felt that the price floor has been reached.

Depressed consumption resulted in there being few trades in the Italian rebar market.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Italy, was €810-860 ($839-890) per tonne on Wednesday, stable week-on-week.

Slow demand and a wait-and-see attitude among market participants resulted in there being few trades.

“Demand remains low,” one trader source said, “[and] is likely to stay the same until the end of the year. The future is uncertain, but we forecast that the first few months of 2023 will be difficult.”

“Demand is very slow currently,” another buyer source said. “The general feeling in the market is that conditions are going to remain the same until the end of the year.”

Production cuts have yet to significantly affect prices due to the depressed demand. Some mills were said to be intending to extend Christmas production stoppages longer than usual.

Market sources remained pessimistic regarding the effect that such extended stoppages would have on prices, given that supply still dramatically outweighs demand.

But future infrastructure projects could boost prices in the new year, sources said.

“I think prices will remain stable for the remainder of the year,” one buyer source told Fastmarkets. “The market is calm, and we are waiting to see what infrastructure projects the new government [in Italy] will invest in next year.”

Weak demand resulted in few trades being agreed in the Spanish rebar market, Fastmarkets heard.

Energy and scrap price increases may boost prices, sources added.

Mills cannot continue to offer discounted prices if input costs are rising, Fastmarkets heard.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was €730-760 per tonne on Wednesday, stable week-on-week.

International scrap prices affect the prices of all long steel products. Scrap prices remained flat through early November, but have begun to rise since the middle of the month.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $361.44 per tonne on November 30, up from $344.65 per tonne a week earlier.

Published by: India-Inés Levy