No change yet in Southern Europe rebar, wire rod prices despite higher scrap costs

Prices for long steel products in Italy and Spain were unchanged in the week ended Wednesday March 22, despite significantly higher scrap costs, sources told Fastmarkets.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €730-760 ($788-821) per tonne on Wednesday, unchanged from March 15.

Producers were understood to be seeking higher prices, but had either not yet had these accepted or had not issued higher offers yet.

The primary factor behind targeted rebar prices rises was the higher scrap costs settled by mills for March, with month-on-month increases of €25-50 per tonne, depending on the grade.

Buyers were likely to resist attempts to increase rebar prices because of persistent sluggish demand.

“Producers are calling for increases but they can’t [get them accepted] because downstream demand is pretty much silent. Everyone now sees that demand is so low,” a trader said.

Another factor that could erode mills’ margins and increase their desire to raise finished steel prices is the expectation that the Italian government could remove industrial energy subsidies from April 1.

Market sources said there were no confirmed details about this government move and they were unable to calculate how much additional cost it could mean for producers. Some sources even suggested the subsidy could be reduced instead of completely removed.

Nevertheless, all sources believed it would result in some degree of increased cost to mills that they would try to pass on to consumers.

And it was even suggested that demand could increase in the coming weeks, with buyers looking to lock in prices before the effects of the subsidy removal are fully seen in long steel prices.

This was expected to be a bigger factor in the wire rod market, where one mill source said it was confident of achieving increase of up to €50 per tonne for April deliveries.

For the time being, however, wire rod prices were also stable.

Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe was €680-700 per tonne on Wednesday, unchanged from March 15.

Rebar prices in Spain, meanwhile, were also flat.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €740-770 per tonne on Wednesday, unchanged since February 8.

Fastmarkets’ monthly price assessment for steel scrap E3, old thick scrap, domestic, delivered mill Italy was €390-410 per tonne on Monday, up from €340-385 per tonne on February 14.

Published by: Ross Yeo