Sources on the rebar market tell Kallanish of price hike announcements by one German mill, and indicate that the other producers will follow.
After months of inertia on the market with virtually no price moves, despite some failed attempts, the latest announcement seems a bit more promising, one buyer comments. Base prices have been little above €350/tonne ($367) for a long time, plus €265 size extra, equalling a delivered price of €615+/t. The new offer brings the price up by €20-25/t, and another hike of that size could follow in December.
According to the buyer, orders have been placed by benders last week in a buying wave for delivery in January/February. Those who come later would have to accept a higher price, he says.
This is not unusual towards year-end, when mills try to fill their capacities for January, and benders want to place orders for replenishment at friendly prices. Once the order books are full, mills would then ask for much higher prices. For example, tardy buyers now may be looking at €400/t base, for those in late need to fill gaps, another buyer explains.
“Customarily, we have had a price surge in November/December for decades,” he says. Still, that buyer finds the hike attempts so far to appear “rather blurry.”
The move this year seems to come earlier than in other years, and other observers have not yet registered that any movement is taking place.
Apart from the seasonal influence, arguments differ with regard to costs as a factor to bring up prices. According to the above buyer, the mills have to cope with higher wages, CO2 taxation, and massive losses. They badly need to catch up.
Against that, MBI Infosource forecast models predict a drop of 3% by early December, on the basis of lower production costs and softening scrap prices.
Christian Koehl Germany
