The European domestic markets for steel rebar and wire rod have remained quiet after the Easter holidays, with buyers maintaining a wait-and-see stance. At the same time, producers were looking for further price increases amid a significant drop in import activity and higher production costs.
Southern Europe
Buyers in Italy were said to be taking a cautious approach because it is currently difficult to relay higher costs to construction companies in the current conditions of geopolitical uncertainty.
Many cut-and-bend mills reported plans to use stocks created earlier at lower prices rather than actively purchasing new volumes.
“My intention is to use the warehouse this month in order to monetize it,” one cut and bend producer said.
“On the other hand, mills have announced higher offers, which gives us hope for further [price] increases. We’re undecided whether to continue with the idea of using the warehouse, or to stock up heavily this month to liquidate the surplus in May,” he added.
“Demand is dropping a bit [so] let’s hope the [the conflict between the US and Iran] ends and the entire market starts to go up again,” he said.
“Construction [operations] are going slow,” a trading source said. “Price escalation on all building materials is making operators careful. They do not accept the uptrend, [and] prefer to wait for a clearer view of the situation.”
As of Wednesday, both producers and buyers said that pre-holiday prices were still applicable, with €670-690 ($783-806) per tonne ex-works being proclaimed as the workable range in the North and €700 per tonne ex-works in the South.
But by the end of the day, information came to light about some suppliers setting a target of €720 per tonne ex-works as the initial offers for the next round of sales.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Italy, narrowed downward to €670-700 per tonne ex-works on April 8, compared with €670-710 per tonne on April 1.
The Spanish market was also said to be largely quiet in the week to Wednesday, so Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, remained at €715-725 per tonne on April 8.
Local suppliers, like their Italian peers, reported intentions to raise offer prices from Monday next week.
Lack of competition with import material, combined with growing production costs, and scrap and energy prices, as well as a favorable economic situation, were said to be the main drivers for the positive mood.
Northern Europe
A similar situation was seen in Northern Europe. Estimates of workable prices for rebar in Germany remained at pre-holiday levels of €655-665 per tonne delivered, while offers were heard at €680 per tonne delivered.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, remained at €655-665 per tonne on April 8.
Market participants noted that demand for long steel in the region was currently stable to slightly decreasing, but the limited import activity resulting from the introduction of the Carbon Border Adjustment Mechanism (CBAM), and imminent changes in the safeguarding measures, meant that local mills enjoyed healthy demand.
Nevertheless, the goal of the producers was not to increase production but to generate better margin.
