Northern Europe rebar price remains stable on mill maintenance closures, weak demand

Sluggish demand and a persistent wait-and-see attitude among customers resulted in little-to-no market activity in the Northern European domestic rebar market in the week ending Wednesday July 27.
In the week ended July 13, Fastmarkets heard how producers, most notably ArcelorMittal, were targeting significant price increases across all long steel products to counter the soaring costs of energy. These price increases, however, have not been achieved, sources said.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €930-1,000 ($946-1017) per tonne on Wednesday, unchanged week on week.

With demand remaining low and mills shutting down for maintenance during the summer season, trading activity remained depressed.

One source said buyers are still in a wait-and-see mode, hoping that prices will drop further. These hopes are based on the fact international scrap prices have dropped over the past week after surging in early July. This attitude, the market participant told Fastmarkets, does not account for energy cost surges as well as possible energy shortages heading into the fourth quarter.

Energy rationing, proposed by the European Commission on July 20, could, if it goes ahead, create upward pressure on energy prices.

Emergency legislation, designed to protect countries from the possibility of Russia weaponizing gas supplies over the coming months, would enable the EU Commission to impose 15% binding gas consumption restrictions on EU countries over the next two years.

Upon the proposal being accepted and the measure being passed, each country would have to decide how these cuts would be imposed.

With energy prices already exploding, news of rationing and potential implementation of rationing could drive up energy prices more. It would also make production cuts across EU steel mills very likely, Fastmarkets heard. Production cuts will likely reverse the downtrend across all long steel products, sources said.

Another source, while recognizing the impact cost increases might have over the longer term, said prices for rebar will remain the same until the end of August when the holiday season is over.

Decreasing international scrap costs since mid-April have also been a major factor in the falling rebar market. Scrap prices jumped in early July but corrected in the week ended July 20.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $382.50 per tonne on July 20, down from $398.49 per tonne a week earlier.

The correction in scrap prices has continued this week, with the index most recently calculated at $351.19 per tonne on Wednesday, unchanged from a day earlier but down from $364.85 per tonne on Monday.

Published by: India-Inés Levy