Despite efforts by Germany’s rebar mills to bring up prices, the achievable value is not much above €600/tonne ($702) delivered and unlikely to see another uptick this year.
In earlier years, mid-December sometimes brought a jump in offer prices after mills had sufficiently filled their books into January and then demanded higher values for late sales. That effect appears weaker this year. Mills made a hike attempt already in November, with minor success. “They tried to push through an increase of €40, but achieved only €20,” a buyer tells Kallanish.
The offered base price would now be at €340/t – plus the standard size extra of €265, this would result in a delivered price of €605/t.
Although recent figures by Germany’s construction association, Hauptverband der Deutschen Bauindustrie, indicate an upward price trend that started in autumn, it seems to be occurring more in the segment of larger buildings and infrastructure. This is the playground of larger cut-and-benders, characterised by the rule that projects are seized in rough competition at low offer prices, sometimes below rebar intake costs.
According to the manager, that rule applied already in earlier times when construction sector activity was more favourable. Big players “compete at dumping prices to keep their staff occupied,” he says. He blames not so much the construction companies as he blames the benders, naming one group as especially notorious in this game.
“Mills are perfectly right with trying to achieve higher prices amidst high electricity and other costs, but they cannot succeed as long as the benders cannibalise one another,” he concludes.
