German rebar pricing shows split signals

German rebar pricing shows split signals
Although demand has recently encouraged most German rebar mills to ask for higher prices, some say this may be a temporary flexing of muscles that should subside going forward.

Since many transactions were closed below a base price of €550/tonne ($585) by early December, mills have their order books sufficiently filled and are now asking for €30-40/t hikes, observers tell Kallanish. This should raise the upper end of the offer range to €580/t base, which plus the size extra of €265 totals €845/t delivered. But figures diverge, depending on the mill and deal, a northern German manager cautions.

“Often in past years, distributors would buy in December for January delivery because they believe the new year begins with a price increase. But often enough, that did not ring true,” he tells Kallanish. He himself prefers the philosophy of buying only enough to have outstanding construction jobs covered, but not to replenish inventory for the longer run. “We buy enough to serve our projects, but will not go for 1,000 tonnes that last until April,” he opines.

In line with observers in other German states, he sees a relative stabilisation of prices, but considers it shaky. “If one mill gets nervous and starts giving concessions, and often it is the big international players that do so, the others will follow quickly,” he warns.

International rebar association Irepas, too, said last week that “the current status of the market can be described as highly unstable and unpredictable”. It noted that competition in regional markets is “very difficult and fierce”, which could easily undermine a temporary stabilisation.

Christian Koehl Germany