Lack of demand keeps Southern European long steel prices constrained

Slow trading in Southern Europe’s rebar and wire rod markets kept prices unchanged in the week to Wednesday January 17, sources told Fastmarkets.

Rising electricity and scrap costs means that steel mills are reluctant to reduce their offer prices to encourage sales and market participants remain split over the likely price trend for the rest of the first quarter, Fastmarkets understands.

While some market participants expect to see an upward price trend heading into the warmer months due to the higher input costs, others said the lack of demand would inhibit any moves to increase prices, sources said.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €670-690 ($728-750) per tonne on Wednesday, widening down by €10 per tonne from €680-690 on January 10.

Consumption was subdued in the Italian rebar market.

“The market is quite confused because the producers are asking for €680-690 per tonne, but the buyers don’t want to pay more then €650-670 per tonne,” a buyer source in the region told Fastmarkets.

“A deal was reported at €670 per tonne, but producers will try to move prices up again. The [cost of] scrap has increased and energy costs are likely to increase in the future,” the source added.

Another buyer source said: “The rebar market is a little confused this week because scrap prices [are rising], but rebar demand is not so good. Producers would like to increase their prices, but customers are not buying and are waiting for a decrease.”

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €665-670 per tonne on Wednesday, unchanged week on week.

Wire rod
Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €640-650 per tonne on Wednesday, narrowing down by €10 per tonne from €640-660 per tonne last week.

And like the rebar market, rising input costs and weak demand resulted in mixed sentiment regarding the future direction of prices.

“Mills are saying they will increase prices, but I am very skeptical that a further price increase will be accepted because [there is very little] demand,” a wire rod buyer source said.

Published by: India-Inés Levy