European long steel round-up: domestic rebar prices stable on subdued demand

Northwest European rebar prices held stable in the week to 11 February on subdued consumption dynamics and a lack of immediate need for distributor restocking, while interest in imported rebar appears to be growing. 

McCloskey’s sources reported price indications for Northwest European rebar on a delivered basis, at Eur610-620/t delivered. Offers in the German market were heard between EUR620-630/t delivered – in line with recent increases – but the hesitancy of buyers to commit to volumes amid regulatory and consumption uncertainties is limiting the possibility of producers realizing these levels at present.

That said, producers are “cautiously optimistic” of a bullish trend later in the year – confirmed by IREPAS’ market outlook for February – anticipating stronger pricing power once existing inventory levels wind down and buyers return for more substantive purchasing. Import accessibility will also see further restrictions – already burdened by Carbon Border Adjustment Mechanism (CBAM) liabilities – from reductions to EU tariff-free quota volumes for steel products.

Importers are generally becoming more comfortable with navigating the specifics – and pitfalls – of CBAM, agreeing to share liability with producers via indemnification or hedging clauses. Both producer and trader sources confirmed that third country exporters are increasingly agreeing to fix CBAM liability at a certain emissions level, with either the exporter or importer compensating the other where verified (or forced default) emissions declarations result in higher or lower values than fixed at the time of the trade.

In that context, increased interest was identified in the EU market as regards imports, especially from origins closer-to-home like Turkey, Algeria, or Egypt – though importing still seems subdued as compared to usual levels. Offers from said origins were reported in the range of EUR500-510/t CFR Antwerp, which when accounting for potential CBAM, safeguard, and logistical costs, still offers insufficient margin to engage much interest from non-incumbent suppliers, to the benefit of domestic market share.

Author: Benjamin Steven