Several German rebar distributors have expressed dismay over big deals for construction projects struck recently, involving prices at which suppliers cannot possibly break even.
Sources are bewildered about one particular prestige project in a big city over a five-digit tonnage for which rebar supply was apparently awarded at €800/tonne ($907), or slightly more if considering all extras such as transport. This must be set off against rebar purchasing prices of at least €815/t delivered that prevailed in December. Base prices then were €550-570/t, which plus the fixed size extra of €265 would come to €815-835/t.
And, of course, this does not yet include the customary processing services like cutting and bending. On top of that, the restocking price could become unfriendly, as mills are heard reaching out for €600, at least nominally, now that their books are temporarily full.
“A few distributors are stirring up the market with tendering offers for construction jobs between €800 and €840; I have even heard of €790,” one manager tells Kallanish. These offers cannot be justified with low-cost inventories from a year ago, before mills’ prices surged massively. “Nobody has such big warehouses,” the manager is sure.
One source believes big buyers are bidding at such low prices just to starve the smaller benders, to achieve more market hegemony in the long term. “Once you are the only left, you can dictate prices,” he says.
Smaller benders just cannot keep up in a game like this. “Our offers are well above €900, more towards €1,000, but we would have to go under €900 to compete,” he says.
Christian Koehl Germany
