Germany’s rebar mills are trying to bring prices up, following last week’s buying spree, which apparently signals a temporary increase in production, which mills have kept at low levels for a month.
For nearly two months, prices were hovering slightly south of €600/tonne ($633) delivered, a threshold that would easily be surpassed now with a €50/t hike, or possibly more, according to some sources.
The base price for most of July and August was at €320-330/t, which plus the size extra of €265 translates to €585-595/t. Mills had targeted €350/t in July, but had no chance of fetching it. In fact, one larger distributor was able to secure deals at closer to €300/t, its manager suggests.
Last week, numerous customers restocked their shelves, apparently prompted by the mills. “The spree was induced by the announcement of lifting prices by €25. We then bought a larger tonnage for the old base price, €320, but it had to happen within one hour,” a buyer tells Kallanish. “That’s a way to collect volumes.”
And once the order books are full, the next normal step is another price hike announcement, for those who came late, but observers believe there will be little uptake. “Mills lifted prices, and not just by a bit, but a hefty €40 on average,” another manager says.
He sees base prices now at €370-380/t, which would translate to €635-645/t delivered. He believes this will be hard to assert in the foreseeable future, given the dismal state of the construction industry. “The [rebar] benders do not have the demand they once had, and it is the same with any construction material dealer,” he notes.
It will therefore take a while before the next purchasing wave comes, and by then the recent hikes may have all but deflated.
Christian Koehl Germany