Italian rebar prices are rising in contracts, though demand remains subdued, and buyers are reluctant to restock at current levels.
Producers are seeking €460/tonne ($541.07/t) base ex-works, a level that has not yet been translated into agreed contract prices. Transaction prices have risen around €30/t over the past week to €440/t base ex-works.
Buyers and agents are uncertain over downstream demand and their ability to pass increases on. Despite this, price increases are holding. Two buyers tell Kallanish they are purchasing only what they sell rather than building stock, while others have reduced volumes to what they can afford at current prices.
One large buyer reports taking just one third of its usual purchasing volume.
A mill source says the market is usually quiet in the first ten days of the month, but buyers return to purchasing in the second half as their inventories deplete, providing enough demand to support the current high price levels.
All European rebar producers have raised prices and none are willing to make concessions, leaving buyers with no choice but to pay the increases.
Producer costs have skyrocketed amid the US-Iran conflict. With the large volumes missing due to the high prices, several mills are planning production stoppages in the coming weeks to balance supply and avoid building high stocks. This will push up their fixed costs further.
Including size extras of €260-270/t, effective transaction prices for Italian rebar are currently assessed at €700-710/t ex-works, up from around €540/t at the start of March. Mesh is at €510-520/t ex-works, before size extras of around €300/t.
