Despite the noteworthy decline of scrap prices over one month, German rebar mills are seen holding their values firm, supported by supply limitations.
An Austrian buyer expresses concern over the scrap price decline, by over $50/tonne in some cases. Rebar prices could follow with some delay. “So, if I buy at today’s prices, will I have to sell below that price in some weeks when mills’ prices come down?” he wonders.
Against that, a buyer at a big German distributor tells Kallanish that “German mills are laid back about it; they do not feel pressured because of low availability of material.” Another manager concurs, and adds that “the range of sorts in the [mills’] inventories is rather thin; your order will be served from new rollings.”
Riva’s rebar mill in Hennigsdorf near Berlin has remained idle since December. Some observers also believe that Badische Stahlwerke, after its merger with Van Merkensteijn, might shift more into production of wire rod than rebar.
Both German managers see domestic base prices at €420/t ($479) and above, which plus the size extra of €265 comes to €685/t. The Austrian buyer says he would be prepared to buy at €50/t below that in Austria, for domestic or Italian material. He also believes there will be more downward price pressure. The German price levels may work “when all mills are unanimous, but not if one starts making concessions,” he notes.
Christian Koehl Germany
