Europe longs: Import demand surges

London, 7 September (Argus) — European demand for imported longs has risen substantially since late August as high energy costs have pushed local prices upwards.

The Argus weekly Italian rebar and drawing-quality wire rod assessments rose by €50/t today, to €950/t ex-works and €990/t delivered, respectively.

In the rebar market offers were over €1,000/t ex-works, with some saying costs were approaching this level, but most sales were heard done in the range of €940-960/t ex-works. But at the moment customers prefer to stay in a wait-and-see position to understand what will happen in the next few days.

In the Balkan market one regional producer was heard offering €820/t ex-works, but import material was available from local traders well below this level. The lowest levels were reported in non-EU European countries at €725-755/t delivered, which was €20/t above the levels in late August.

Many customers booked large volumes at previous prices in late August-early September, but demand was coming mainly from private-sector construction while demand from the public sector was on hold because of the elections, a Balkan participant said.

European producers were considering introducing €150-300/t surcharges to cover higher production costs. But some of them had to switch off their blast furnaces and turn to import billets. A 30,000t lot of Indonesian billet was reported to have been sold late last week at $515-520/t fob, with shipment to German and Polish ports, along with another large tonnage booked at $510-515/t fob booked to the Middle East and north Africa region.

Along with this, multiple sales of overseas wire rod have been reported to different European countries since last week. Malaysian material was heard booked at $670-700/t cfr, with Algerian wire rod booked in a range of $695-710/t cfr last week. But this week offers were heard up to $750-760/t fob for Algerian wire rod, with rebar quoted at $715-720/t fob from this destination. Other north African suppliers sold wire rod at $720-735/t fob, with further negotiations for Egyptian material underway. Turkish suppliers have also seen a rise in requests from the EU, indicating prices at $700-760/t fob depending on the mill and grade.

In the local European market, wire rod in Poland, Germany and Italy was quoted over €900/t delivered. In particular, in the domestic market Italian drawing wire rod was available at €980/t ex-works, while Polish mills quoted from €910/t delivered to up to €980/t delivered depending on the quality. Italian offers to export markets were at €900/t ex-works for drawing quality material and €880/t ex-works for mesh quality material, with Czech wire rod heard available at €850-870/t delivered to Poland. Ukrainian material was quoted well below this level, but sales have not been reported yet. Some bids were reported as low as €820-830/t delivered in Germany and Poland, while in Italy customers started purchasing gradually at new levels.