EU longs suppliers eye market stabilisation after uncertainty

The European long products market is seeing some signs of stabilisation after a prolonged period of downward pressure, according to steelmaker sources.

The latest measures implemented by policymakers in Europe have pushed gas price down to more sustainable levels, after the spike seen since the second quarter. “Uncertainty in our sector was driven mainly by the fear of energy costs and inflation; now, if energy prices stabilise, we could see a revival of large construction and infrastructure projects previously put on hold,” one steelmaker source observes.

Another issue impacting longs market sentiment in Europe has been destocking. Observers believe the destocking is now coming to an end. In Germany, for example, stocks of beams have reduced significantly, from over three months’ worth of sales to some 2 months.

Despite hopes for a normalisation of the market, sources believe a price increase is yet to be implemented firmly. According to Kallanish indices, rebar prices in northern Europe are continuing to trend down, but remain above the levels registered when the Russian invasion of Ukraine started in late February.

The market is in a similar situation in Italy, where prices nevertheless moved down more during recent weeks, thus widening the gap with northern European values. Still, European steelmakers explain that they are not making any Ebitda on sales of commodity grades at the current price levels.

In the coming weeks, the market is also expected to feel more impact from reduced supply from local steelmakers. One source notes that, with intermittent stoppages, his company cut production at electric arc furnace operations by some 20-25% in recent months.

Import arrivals have also slowed down somewhat. According to official data related to EU safeguard measures, during the first month of fourth-quarter quotas being available, only some 66% of rebar quotas have been used and 26% of wire rod quotas. In Q3, during the first month, almost 80% of rebar quotas were used and some 46% of wire rod quotas.

Emanuele Norsa Italy