German rebar buyers doubt mills’ anticipated hikes

The big price hike targeted by some German rebar mills for orders in April is being met with scepticism among buyers, which is not surprising, given the sheer degree of the increase. Some buyers even doubt that any hike can be achieved at all.

According to several market sources, German mills, which for many weeks could not secure deals much beyond €700/tonne ($758) delivered, will soon ask for €50-80 more.

“The coming weeks will show if that announcement is realistic, in view of ongoing low demand,” one German buyer tells Kallanish. Another one gives the clearer assessment that “they may get €30, and it remains to be seen”. A Dutch source hears an altogether lower announcement of €20-30, but doubts that even this will be accepted. “It depends on the scrap prices for April,” he observes.

Scrap prices have been rising since early in the year, by around the €80/t that mills are targeting as the maximum hike for rebar prices. But the other cost push, electricity, has seen prices ease to nearly pre-Covid levels. The remaining problem is the lack of demand amid cancellations of many residential building projects since last year.

“There are two worlds colliding,” another German observer says to describe the situation. “Benders are not placing noteworthy orders, demand is clearly going down. And the mills cannot lower prices because it would mean making losses for them,” he opines. “I expect the next buying spree to come in May, by which point we will have a clearer picture.”

Christian Koehl Germany