The latest announcements by German rebar mills of price hikes lifting base levels to €400/tonne ($461/t) appear to have been largely accepted by the market, Kallanish notes.
Mills are reportedly keeping their offer volumes low. In Austria, the Alpine price gap has virtually closed after the latest announcement from Italian mills.
According to German sources, the rise is seen across all domestic mills, and equals around €50/t, although in some cases more, depending on the previous level. Adding size extras of €265/t, the delivered price would come to €665/t, “and it will have to be paid,” a Ruhr-based buyer is sure.
Sources in Austria agree. The sudden hike seen in Germany at the end of last week is not being reported from Austria, where an announcement of more than €30/t came already, shortly after the US-Israeli attack on Iran.
Austrian sources also report a €30/t hike announcement from Italian mills, with the Italian domestic market striving for an increase of as much as €70/t.
To Austria, the latest offers are at €660/t delivered, so do not make much difference to the price of German mills. Observers note recent transport costs have risen to the point they eat up the price advantage of Italian mills.
The cost factor is a strong driver, with rising fuel and other energy prices looming due to the crisis in the Persian Gulf. Buyers express sympathy for the increases, but also note that demand on the market has not risen from its long-term trough.
One manager believes the current offers apply mostly to existing inventories at mills, “and once they are sold off, they might revert their prices”. He adds that fear of further hikes is the only cue that is making people buy.
However, another manager says such a move might be a good cause to spur activity. “As a trend, the customer buys when they believe prices will go up,” he says. He notes that mills are currently playing hard-to-get, offering only small volumes for sale, to keep avenues open for further increase.
