Europe longs: Slow demand weighs on sentiment

European producers of long products grappled with slow demand during the winter season, trying to attract local customers with discounts.

Argus’ weekly Italian rebar assessment softened by €5/t to €610/t ex-works, but the drawing-quality wire rod index was flat at €665/t delivered.

Sale levels for Italian rebar plummeted to €600-610/t ex-works this week, including extras for sizes (€340-350/t base), down by €10/t from the last completed sales and down by €20-30/t from offers. Demand has been low in recent weeks and producers are unable to reverse the trend, an Italian participant said. Also, scrap sentiment slightly softened in the international market, with some participants expecting costs to decline in Europe in the near term. But others expect prices to rebound as soon as mills improve their order books.

Offers for Italian rebar and rebar in coils to other European regions remained at €600/t fca and €620/t fca, respectively, but some mills were heard willing to discount for sizeable volumes. Fob offers were at €610-630/t fob, mainly coming to Greek customers. In Bulgaria, Italian rebar was available at €665/t delivered, but received no feedback as local and other origins were quoted lower.

The Italian wire rod market was stronger and mills continued targeting €680-700/t delivered for drawing-quality grade locally and to central European countries. But a level of €660-670/t delivered was considered workable depending on volume.

Despite increases in local rebar offers indicated by most European producers a few weeks ago, sales levels in central Europe remained low as colder temperatures delayed a recovery in the construction sector. It will take at least a couple of months to see any improvements after EU funds were allocated to Poland, a participant said. But demand for some steel products in Poland has also been driven by the conflict in nearby Ukraine, with the need to produce more finished products to supply there, another participant added.

Rebar was heard being still available at about 2,780-2,860 zlotys/t ($689.24-709.08/t) delivered in Poland last week, the equivalent to €640-660/t delivered. Tradable values for wire rod in Poland were indicated at about 2,900-3,000 zlotys/t delivered, which translates to about €670-690/t delivered.

But some central and eastern European buyers restocked from Moldova last week, with prices for wire rod indicated at €630-640/t delivered and up to €20/t lower for rebar.

In the Balkans, Bulgarian rebar was available at €640-650/t delivered locally and €650-670/t delivered to Romania late last week. Romanian rebar of 12mm and above was still quoted at $620-630/t delivered.

But in Romania, traders were offering import rebar and wire rod from €630/t to €660/t delivered. Egyptian and Algerian rebar was available at $600-615/t fob to European buyers, with Turkish rebar and wire rod quoted at $610-620/t fob and $630-640/t fob, respectively. Buyers restocked mainly with small volumes of Egyptian rebar and Turkish wire rod a few weeks ago, while a 30,000t lot of Turkish wire rod was heard booked to the Netherlands slightly below the offer level last week. Since then, buyers have largely adopted a wait-and-see stance, awaiting clarity on price direction. Some European buyers were reported showing interest in wire rod from Vietnam and other origins, given that the “other” country quota was exhausted and Turkey filled more than 50pc of its allowance. Spanish buyers were heard bidding €610/t cfr for drawing-quality grade.