EU long steel prices remain firm amid strong mill order books

EU long steel prices remained strong over the week to May 4, with mills holding offers firm amid healthy orderbooks, but buyers remained reluctant to buy at high prices amid relatively long lead times, sources said.

Platts assessed TSI Northwest Europe Rebar at Eur1,327.50/mt ex-works May 4, up Eur7.50/mt on week, according to S&P Global Commodity Insights.

A distributor in the Benelux region bought 500 mt of rebar at Eur1,355/mt delivered, adding that rebar was still available for end-May delivery from certain non-German mills.

“I think that rebar prices can come slightly down in May as scrap is coming down,” the distributor added.

Platts benchmark Turkish import premium heavy melting scrap 1/2 (80:20) market on May 4 was assessed at $539/mt CFR, down $115/mt from $654/mt CFR on April 4.

The sharp drop in Turkey has led some market sources to expect May EU domestic ferrous scrap contracts for shredded and HMS grades to drop by anywhere between Eur60-85/mt on month from April prices. Negotiations were not close to concluding, sources said.

“Rather than talking about rebar prices, but we should talk about the delivery time – a number of German mills are fully-booked, and they are now delivering for the end of June so it’s no surprise that buyers aren’t buying material two months ahead,” an Italian mill source said, adding that they were selling regularly into Germany/Benelux at Eur1,360/mt delivered for end-May shipment.

German mill offers remained firmly above Eur1,360/mt delivered, the Italian mill source added.

Another European mill source said rebar was workable at Eur1,300-1,320/mt delivered Germany, with most buyers considered to be in a “wait-and-watch” mode, amid some expectations of near-term price softening.

“[A near-term drop in] scrap prices may provide some respite, but crude steel production costs are still strong,” the European mill source said.

Mills held European domestic steel sections prices firm over the week to May 4.

Platts assessment of the European medium sections price (category 1, S235 JR) was Eur1,500/mt delivered May 4. The price has been unchanged at this level since March 30.

“Orderbooks for May production are strong, so I don’t see lower prices in the short-term, but maybe more in the medium-term,” a third mill source said. “There isn’t much buyer activity, it depends on the next few weeks.”

A second distributor in the Benelux region reported a deal for 200 mt booked the week ended April 29 at Eur1,500/mt delivered.

“Mills have a good orderbook and they are fully booked for May rolling – there is also no import pressure due to the small allocation of the import safeguard quota,” the second distributor added. “We’re expecting EU domestic long steel prices to remain largely stable over May, but perhaps with some small corrections.”

— Viral Shah