French buyers intend to rebuff longs increases

Some French buyers say they will try to refuse the recent wave of steel price increases implemented by European producers before the end of last year, despite contract values for rebar rising in recent weeks.

The industry is still on holiday, with activity, like in most European countries, expected to resume on 8 January. Despite the hikes on all long products, demand remained uncertain in France until the end of the year. A purchasing group says its members intend to keep stocks low given the current economic climate and downturn in the French construction sector, which saw output decline greatly in 2023.

Distributors’ purchasing volumes were weak through year-end. Last month did not bring any significant restocking. However, some restocking is seen happening in January. Purchasing groups are resorting to buying abroad for more competitive deals.

“These increases will not last. Stocks are low and we are going to buy as little as possible. Prices for all longs will inevitably go backwards. There was ‘technical’ demand at the end of the year because stocks were low throughout the country, but if the construction sector does not resume ordering volumes, the high prices will not stick,” a source comments.

French rebar values are flat on month at €650/tonne ($561) delivered on average, Kallanish learns from market sources.

The construction industry in the country is showing no signs of recovery. The sector’s crisis is deepening, particularly in the private residential segment, and is now expanding to non-residential construction. In the third quarter, the fall in new building sites exceeded 20%, while permits for new construction collapsed by almost 30%. The outlook remains negative (see Kallanish passim).

Natalia Capra France