German rebar suppliers to the construction industry are acting more and more desperately to maintain their high utilisation levels, at the cost of unprofitable prices.
“Distributors and benders everywhere are in panic about losing business,” one observer, himself a manager of a bender company, tells Kallanish. “They have become used to the high level of work in recent years; they cannot imagine working at normal utilisation without extra hours,” he says. “I find this a very troublesome development.”
His view is shared by a large distributor, who notes that sales to customers are being signed without covering the intake costs. “You hear offers of €1,000/tonne [$999], cut and bent, for fear of not securing an order if you ask for more,” he observes.
This stands against intake prices for rebar of €1,000-1,050/t, at which domestic mills sold throughout the summer. The discrepancy has been aggravated by the most recent, sudden price dip at mills, bringing delivered prices down to €865/t, comprising a base price of €600 plus the size extra of €265.
Business might still work best in rural areas, “but not in the metropolitan areas, where competition for projects is running really hot,” one manager notes (see separate construction story).
Christian Koehl Germany
