Italian rebar producers are raising prices by as much as €70/tonne ($81.48/t) after suspending sales last week amid a sharp rise in production costs linked to the escalation of the Iran-US-Israel conflict, market sources tell Kallanish.
The Italian longs sector is being impacted by the sudden increase in petrol and transport costs, alongside steep rises in gas and electricity prices. Some mills are considering reducing output or cutting shifts to limit production costs which could trigger some shortages, according to sources.
Downstream demand, however, remains weak. Before the conflict, contract values had already declined by a further €10/t amid subdued consumption and slowing construction activity, reaching around €270-280/t base ex-works. Mesh prices had also softened to €340-360/t base ex-works, plus roughly €300/t in extras.
Before the conflict started, including size extras of €260-270/t, effective rebar transaction prices were assessed at around €530-550/t ex-works. This week, producers have returned to the market quoting rebar at €350/t base ex-works, a move that has triggered strong resistance from buyers.
Several market participants say they will not accept the new levels, arguing they cannot pass on the increases downstream. The new asking price for mesh is now €410/t ex-works.
One source at a construction company warns that such a sudden hike in energy and steel prices could delay the start of new building projects, as contractors reassess costs. Another says he will not buy at current prices and can afford to suspend purchasing for three weeks.
Meanwhile, most other European rebar mills are also moving to lift prices. This is in addition to ArcelorMittal and several other producers in Europe seeking higher prices for long products, including rebar, by an average of €15-20/t depending on product. In France rebar prices are rising by €20-30/t (see Kallanish passim).
Author: Natalia Capra France
