German bender puts minimum price tag on rebar

As Germany’s construction industry is struggling to come back to life from suspended animation for over a year, rebar distributors are cannibalising each others’ orders. One of them has now come out with the clear announcement of a minimum price that benders would need to charge for processed rebar to cover their costs.

In a letter received by its customers in June, a southern German distribution group says it need a sales price of €700/tonne ($762) to break even. Its wording – “the price level needs to rise to €700/t” – suggests it recently accepted lower prices. It notes the necessary basis for this figure is stability of its purchase prices.

Mill prices have hardly moved since spring. The price paid by the distributor at its doorstep is around €640/t delivered, on a base price of €370/t. According to the buyer for another bender in central Germany, these have not varied by more than “give or take, €5-10” in a couple of months. He dismisses reports of weekly price drops or surges. “There are no moves on the intake end. Sometimes mills will go down by a few euros to motivate a bigger order; next thing they will go back up by a few,” he tells Kallanish.

On the proposed price tag, he says that “I can subscribe absolutely to the mark of €700; anything lower would be a loss, but you hear of it everyday.” Somewhat critically of the author of the letter, he also notes that “if they’d stick to their announcement, we’d all be better off”.

Christian Koehl Germany

kallanish.com