Europe longs: Price cuts continue

Weak construction demand weighed on buying activity in Europe, with producers trying to fill gaps in their order books providing further discounts.

The Argus weekly Italian rebar assessment fell by €20/t to €660/t ex-works, with the drawing-quality wire rod index remaining at €650/t delivered.

Italian mills cut their selling prices to €660/t ex-works in the domestic market this week after setting offers at €690-700/t ex-works, with further production cuts expected in June given extremely slow buying activity in Europe. There is a lack of ongoing construction projects. That is why nobody is looking for material and prices are falling daily, a European participant said. Some participants expressed hopes that demand might improve closer to the end of the summer, but others took a more sceptical view. Italian drawing quality wire rod prices remained mainly in the range of €650-660/t delivered.

But after Italian rebar offers fell to €620-630/t delivered to central Europe last week other regional producers had to reduce their prices too. In particular, Spanish rebar was heard quoted around €650/t cfr northwestern Europe, but discounts up to €20/t were heard available this week. In the meantime, offers from Polish suppliers to Baltic countries were tabled at €645-650/t delivered, with similar levels heard for Ukrainian and Uzbekistan material. Polish suppliers were willing to sell at least €15/t cheaper. Rebar in coils from Italy was available at €650/t delivered Germany this week.

Italian rebar in coils was booked at €570/t fob bound for Balkan countries, with negotiation for rebar heard under way at €550/t fca. But buyers’ targets were well below given lower import prices.

In particular, Egyptian rebar and wire rod were sold to Europe and other destinations in the range of $565-575/t fob, with cfr levels for this origin to Balkan customers indicated at slightly below €550/t cfr. Algerian material was quoted around $600/t fob while Turkish offers stood at over $630/t fob, which was not attractive to European customers. In the meantime, Iberian customers continued purchasing Malaysian wire rod with last week’s deals at €535/t cfr despite new quota restrictions expected.